From my POV, the problem with consulting is that large companies either recognize how important software is for their success and develop it in-house or are foo

From my POV, the problem with consulting is that large companies either recognize how important software is for their success and develop it in-house or are foolish enough to outsource it to large consulting players (IBM, Accenture, some Indian firms). They mostly have no interest in a tiny consulting shop, which is a shame for you, because they have tons of money to spend. Unfortunately, this leaves you mostly serving all remaining parts of economy (mid and small companies, software startups etc.), which is far less juicy. Interestingly, in my country (Poland) some large corps (a large telecom for example) are open to throwing a smaller and less important projects towards a newcomer - but for an unattractive, fixed price (they want to see if you can deliver on the same level as the big players, but for much less). So again, you're being squeezed. Of course, all of this is true assuming you're doing commodity software development. I imagine it's very different if you have an expert niche knowledge that is in demand (like security perhaps?).