Drat...one of your small clients wants to hire a full-time IT guru and let you go. It's bad news, but be ethical and advise your client appropriately, even if it hurts.
The most important thing for your client to consider is value, and you can help. A small business rarely needs a dedicated IT employee. There's just not enough work to keep a full-time person busy. You already know that, but perhaps you're spending too much time with this particular client. If that's the case, it should be cheaper for your client to update equipment than hire a full-time employee to put out little fires. Help the client spend that IT salary in a more productive way. This solution is great because you both win.
If that doesn't work, ask the client if he or she would be happy running a corner hotdog stand, because that's how most IT professionals will feel working for a small company. In fact, your client might have a hard time finding someone at all. IT folks, in general, like a challenge -- that's why they're in IT in the first place. Plus, they need to stay current with changing technology, and the small business isn't going to offer that opportunity. Spell it out for your client. A small report that compares the salary and training costs of one full-time IT professional to your consulting fee might do the trick.
In the end, if you can't convince this small business client that a dedicated IT employee isn't the best way to go, just go with the flow. Offer your services to find and train the right employee. Be helpful and professional during the transition. Don't burn bridges if you can help it. It's likely that the new employee will need your help from time to time. It's more likely that the client will call you in six months or so because the IT guru's moved on.
Susan Sales Harkins is an IT consultant, specializing in desktop solutions. Previously, she was editor in chief for The Cobb Group, the world's largest publisher of technical journals.