This might be the wrong lesson to take. You CANNOT deliver quality work if you are over booked. To me, it looks like you need to raise your rates, not accept more work at the current rates, it wont be sustainable.

Well, it depends. I'm fully booked myself, but I hired a good programmer to take on another project. He's not as experienced but is a very fast learner (also he's diligent), so with a few minutes of extra work per day, I managed not to shut the door to am opportunity, and the deliverable is turning out very well indeed.