I've been providing professional development and consulting services since 1991. In 2001, the company developed some products and have been selling and supporting our clients for the last 14 years. While the products provide a good return our business has continued been a split of consulting and products.
The secret to consulting is to provide exceptional services and in many cases being able to field a team of consultants. This can be difficult for a small company and you need to have a roaster of associates to fill gaps on projects that require a team rather then just you.
With products you also need to maintain a high-level of support services and updates to satisfy the client base.
Marketing is critical to both and we have found that client referrals are the best form of marketing. Keep your customers happy and satisfied at all costs to ensure they speak well of you and give you glowing reviews to potential clients.
Marketing in consulting can also be a drain on resources. Too often "free consulting" is provided in marketing phases that can impact your bottom line.
When developing products you need to ensure you have strong client needs built in. The bottom line is driven by sales and if your products don't meet the needs, no sale.
Being an entrepreneur is extremely rewarding and full of risks. Deciding what product and service best suits your business is ultimately by your market.
My recommendation is to do some consulting and develop products while building your client base. You may also discover in your consulting the needs that you can fulfil with products.
Let me know if you would like to discuss this topic further. I'd be happy to share my experiences and offer my advice.