Just because you have a small space to create doesn’t necessarily limit you to small projects. There are many things that can be done to push those walls apart from each other and get the most from your space.
The first thing needed to succeed is the proper mindset. Don’t let yourself be intimidated into passing up the opportunity to tackle something huge in your home workshop. Most large pieces of furniture and cabinetry can be broken down into sub-components, each small enough to be worked on individually and assembled outside the shop. As long as you are realistic and plan carefully before starting out, even the smallest of shops should be able to handle large projects.