What Is the Most Popular Small Business in Manufacturing?

When people think of small businesses, they often picture coffee shops, hair salons, or online stores. But if you look at the real numbers-especially in places like Manchester, Birmingham, or rural towns across the UK-the most popular small business isn’t one you’d expect from a billboard. It’s food processing.

Not the big factories with robots lining assembly lines. Not the multinational brands you see on supermarket shelves. I’m talking about the small, family-run operations that turn local ingredients into packaged goods: jams from farm berries, pickled vegetables from backyard gardens, artisanal bread baked in home ovens, or custom spice blends made in garage kitchens. These aren’t side hustles. They’re full-time businesses that turn £5,000 start-up costs into £100,000+ annual revenues-and they’re growing fast.

Why food processing? Because it’s the sweet spot between low entry barriers and high demand. You don’t need a factory. You don’t need a degree in engineering. You just need a kitchen, a good recipe, and a way to sell. The UK government’s Food Standards Agency reports that over 12,000 small food producers registered in 2025 alone. That’s more than all the small electronics, furniture, and textile manufacturers combined.

How Food Processing Beats Other Small Manufacturing Options

Let’s compare it to other common small manufacturing ideas.

• Textile manufacturing needs sewing machines, fabric suppliers, and inventory storage. Many fail because they can’t compete with cheap imports.
• Furniture manufacturing requires wood, tools, and space. A single workshop can cost £20,000 just to set up.
• Plastic manufacturing demands high-temperature equipment, safety certifications, and chemical handling permits. Not exactly a garage project.

Food processing? You can start with a £1,200 commercial-grade mixer, a pressure canner, and a £50 food safety certificate from your local council. Many begin by selling at farmers’ markets or online via Etsy or Amazon Handmade. No warehouse. No employees. Just you, your recipe, and a steady stream of repeat customers.

Real Examples from UK Small Businesses

In Oldham, a retired schoolteacher started making organic apple chutney using apples from her neighbor’s tree. Within 18 months, she was supplying 14 local delis and had a £75,000 annual turnover. She didn’t hire anyone. She just scaled slowly-adding new flavors, improving packaging, and building a loyal Instagram following.

In Stoke-on-Trent, a couple turned their home kitchen into a micro-bakery that makes sourdough loaves with heritage wheat. They bake 200 loaves a week, sell out every Saturday, and now ship nationwide via refrigerated mail. Their secret? No advertising. Just word-of-mouth and a QR code on every loaf that links to a video of how it’s made.

These aren’t outliers. They’re the rule. A 2025 survey by the Federation of Small Businesses found that 68% of small food producers reported year-over-year growth. The average profit margin? 52%. Compare that to 18% for small furniture makers or 22% for electronics repair shops.

Why Now Is the Best Time to Start

Three big trends are pushing food processing into the spotlight:

1. Consumer demand for transparency-People want to know where their food comes from. They’ll pay more for a jar of honey made by a local beekeeper than a supermarket brand.
2. Supply chain gaps-After pandemic disruptions and Brexit trade barriers, UK shoppers are actively seeking locally made alternatives.
3. Digital selling tools-Platforms like Shopify, Square, and Etsy now make it easy to set up a store, accept payments, and print shipping labels-all from your phone.

Plus, the UK government offers grants through the Rural Development Programme. Small food producers can get up to £10,000 in funding for equipment, packaging, or certification. No loans. No repayment. Just cash to help you grow.

What You Need to Get Started

You don’t need to be a chef. You don’t need to be a marketer. Here’s what you actually need:

• A food hygiene certificate (costs £100-£150, takes one day online)
• A registered kitchen (your home kitchen can qualify if it meets hygiene standards-most councils offer free inspections)
• A product name and label (must include ingredients, allergens, weight, and your business name)
• A way to sell (start with local markets, then add Etsy, Facebook Marketplace, or a simple Shopify site)
• A plan to scale (track your costs per unit. If you’re making £3 profit per jar, you can afford to invest in better packaging or a second oven.)

Many new producers make one mistake: they focus on making more product instead of selling better. The real key isn’t quantity-it’s connection. Tell your story. Show your process. Let people see the hands behind the product.

What Comes Next?

Once you’re stable, the next steps are simple:

• Apply for a Food and Drink Export Scheme-many small producers now ship to Ireland, the Netherlands, and even Canada.
• Get a free business mentor through the British Chambers of Commerce. They pair you with someone who’s done it before.
• Join a local food hub-these are shared kitchens in towns across the UK that let you rent space by the hour. No upfront costs.

The goal isn’t to become the next Heinz. It’s to build a business that supports you, your family, and your community. That’s the real power of small-scale food processing.

Why Other Small Manufacturing Businesses Don’t Win

It’s not that other industries are bad. It’s that they have higher walls.

Plastic manufacturing? You need an environmental permit, specialized machinery, and insurance against chemical spills. One accident and you’re out.

Electronics manufacturing? You need technical skills, components that ship from overseas, and a way to compete with China’s pricing.

Steel or machinery? High capital. High risk. High regulation.

Food processing? The only real barrier is your willingness to start-even if it’s just one batch a week. And once you do, the market is wide open.