How “We’re booked” was ruining our business

It seems like the bigger problem they will have in their business is that they are going to be continuously busy "doing work" instead of "building the business". Such is the way of consulting. If you can't take on more work by hiring more people, then you can't scale. If you can't scale beyond the team you have, you haven't created a business, you've created a job.

There's nothing wrong with creating a job for yourself, but know that it's not the same as a business even if you call yourself a business.

Both those companies spend an extraordinary amount of time in the field developing leads and business relationships. I would be stunned if even a single hour of consulting work is billed without hundreds of up-front hours necessary to land the deal.

In my experience freelancing, if you say "yes" to all new clients instead of "no" -- even if you're too busy and feel guilty for taking work you think you can't do -- you find a way.

When it happened to me, I went from solo freelancer to hiring 6 full-time engineers, which essentially means I created an agency.

It was great. The only challenge then, was convincing clients who'd hired me specially, that "someone else from my team may work on it, but the quality will be just as high."

The worst-case scenario: If you take on too much work, you may end up delivering late. Usually not the end of the world. But if that's not an option, you'll still manage to find a way.

"We're booked until the end of the year" sounds suspiciously like "We're not charging enough money."

One option which is more constructive than "We're booked, let me exit from this conversation" is "We find ourselves in very high demand at the moment. Can I interest you in an offering which isn't the partners personally delivering this entire engagement?" That could be the partners doing e.g. a design/wireframe and then the client shopping that out (or the partners doing so), a training engagement, a product offering ("I have no availability in December to write an email campaign for you for $20k, but you can have me tell your team all about the campaign they could write for you, it will only cost you $2k, and you can keep the video"), or (at the waaaaaay low end of engagement) just sign them up for an email list to have you stay as their top-of-mind team on your problem space.

There's a few other options, too. There is no zeronary Consultancy#are_we_booked? method. It's ternary: Consultancy#are_we_booked?(price, schedule, scope). For a price you can virtually always take on a new client starting tomorrow. (I mean, you can't physically be on two continents at once, but if you're scheduled in New York one week and a client in Germany wants the same week, if they're willing to pay 5X what New York is, then you call New York and say "Hey guys, have I got a proposition for you: how about we delay this engagement N weeks and in return I'll discount 20% off the invoice.")

You probably retain scheduling flexibility with clients unless they pay extra to get scheduling predictability (p.s. ask Thomas about this in more detail, it's a great hack), so if you're scheduled above 80% and a lucrative gig comes in, you might be able bump everything back N weeks without blowing any windows even without having to renegotiate things, especially if you are capable of hiring and ramping someone in that time. That is, of course, the ultimate consultancy scaling mechanism.

P.S. In parallel with any, all, or none of the above advice, if you find yourself above 80% utilization, raise rates.