Build the team of a start up software business working on contract projects?

What is a popular way to build the team of a start up software business that takes on contract work from other companies? Additional info

I founded a small company with a team of web+mobile software developers. We've been around for 9 months. Although I never really wanted to be a freelance web software developer ( it was only meant to pay the bills while i built a saas platform, but that never took off), it's very clear that everyone is looking to me and my team as contractors to build their product. My clients keep referring other clients, and these days, I don't have much time to code anymore. I'm constantly answering calls, doing research into new technology (building prototypes to convince clients to give green light), market research of tech+biz ideas, and educating clients on web and mobile development on how it integrates with their business strategies. I currently have one full time intermediate level developer and one part time jr. developer in my start up company. Additionally, both my clients and my employees say I'm a very good teacher (because I use to tutor and mentor a lot back in school for academics and sports), so I'm very good at helping people realize their strengths and cultivate them.

So I've been deliberating over whether I should continue to grow my team size. How many developers can I manage by myself? Or what should be the team composition/build strategy going forward? How do I answer these questions? Some things that crossed my mind were:

a) hire another jr. dev. I manage the int. dev. and the int. dev manage the jr. dev.

b) hire a sr. dev to manage my int. dev. Then I don't have to think about technology at all, and just focus on business, sales and marketing.

I'm currently billing hourly for just development hours. The hourly rate is usually 50 percent more than the hourly cost of my developer (ie. 2*(developers annual salary)/ (number of full time work hours in year)). This margin/mark up is supposed to help me recover the cost of all that consultation, research, sales, marketing etc...It's too early to tell if this financial arrangement will work out and if it will allow for strategies lke a), b) or whatever else you guys can think of.

Do you guys have any advice on how I can grow my team?

It sounds like you still have some doubts about whether this is the business you want to be in. Maybe it's not currently generating enough profit to convince you. You should think about that first. If you have the business coming in, hiring staff is not the hardest thing. However, it also sounds like you may not be charging enough. 50 pct extra on your billable work, plus other work for free is lean. Consider what it would cost if you had to pay someone to do what you are doing now - the highest skilled work. I know it takes work to make the sale, but too often customers want you to do all the research for free up front. Convince them of the value of that and make it a billable service you offer.

I think you can start with low to intermediate workers and grow them into higher functioning permanent staff, which is probably a key to your success. If that is taking too much of your time, these workers are too low skilled. As your operation grows you can bring in a higher skilled developer/manager. Or you may find that one evolves. You won't keep a highly skilled developer until you have enough work that is high-tech and very profitable.

It sounds like you're off to a good start but just need to perfect your own business model.