Some companies think they can negotiate aggressively with small consulting firms with the promise of future opportunities. They'll increase scope and decrease cost with the bait that the firm would be proving itself for larger upcoming projects.
Walk away if you know that you will lose money on the project. Even if it's a big name company that would look great on your client list. Sacrificing a little now for later rarely works out and sets a bad precedent. If the company does not respect it's vendors during the contract negotiation stage, the company usually does not respect the vendor while engaged on a project.
Providing a reasonable and specific service for free such as a 1 day assessment or a 1 hour training class can be a good way to get your foot in the door. But never compromise on paid services. Not all clients are worth working with. Be selective to keep on billing.
Here is a funny video illustrating The Vendor Client Relationship in Real World Situations.