I have some generic reply and I am not doing business using open
source. Just I have added my thoughts in the hope that it may help.

Almost everyone in India knows how to prepare dosa / roti but still
almost every shop selling them is making profit. Similarly even if
anyone can have source code of an open source software money can be
made from that.

Explaining that you are not selling software but service may not give
an answer to their question. It is difficult for common people to
understand what is the real difference between writing a software and
services related to it. You have to put things in a way that makes
them understand, and it all depends on the context and the person who
you are dealing with. Please keep in mind that people don't want
software but solution - this can be used as a differentiating factor
for the service you provide.

One option is adding features to open source software (similar to
consulting) for a fee.

Hope this helps,
PrasannaKumar
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