Woodbrains
You do seem to be concentrating/fixating on what you can’t do, rather than what you can. My workshop is only slightly larger than yours, and half is given over to storage, so the actual workspace is likely smaller. Ceiling height is less than 8’ - unfortunately...
And yet I run my business from there; it’s a classic one-man-band small business, turning around all the usual fitted furniture of alcove units, bookcases, wardrobes, tv units, cabinets, wine racks, shelving, window seats etc.. etc..
At times it’s absurdly small, but I figure it out. Right now I have a run of three double cabinets with bookshelves above (alcove units essentially, but in a run) as well as a pair of double cabinets on the go. I’ll have to fabricate it, flat-pack it and assemble / fit onsite (no pressure then...) but it’s do-able, even from such a small space. Not easy, but do-able.
Thing is, you seem to have done this kind of work before; so what went wrong? Why did you stop? And is banging out e.g. MDF boxes going to end up as the equivalent of your current job - something you ultimately dislike, and just end up doing for the money?
On a purely personal level, I’d say that if you’re short of time, space and funds, then investing all three in making things to sell speculatively sounds like madness, unless you can actively sell through an established channel e.g. commission sales at a retailer, craft fairs, etsy/‘not on the high street’ type of online shop.
Whatever you do, I hope it works out for you, just remember that you need to be businesslike about it.
If you’re interested in the kind of work I do from a small space there’s a general link to my YouTube channel in my sig, and the workshop tour video is
here.
HTH & good luck.