Cottage Industry Definition

A cottage industry is a small-scale, decentralized manufacturing business typically operated out of a home rather than a factory. The term cottage industry often conjures up images of handmade goods produced in rural areas, but the definition of cottage industry is actually quite broad and can encompass any type of small-scale production.

Cottage industries were historically important in pre-industrial societies, as they allowed families to generate additional income by putting to use skills and resources that would otherwise have gone unused. In many cases, cottage industries were the only source of income for families living in rural areas.

With the Industrial Revolution, cottage industries began to decline in importance as large factories took over production. However, the rise of the internet and advances in technology have made it possible for cottage industries to make a comeback in recent years. Thanks to online marketplaces like Etsy and platforms like Kickstarter, it’s easier than ever for people to sell their wares or raise money to launch a small-scale manufacturing business.

So what exactly counts as a cottage industry? For our purposes, we’re defining it as any small-scale manufacturing business that is not part of a large corporation or conglomerate. This includes businesses that are family-run, sole proprietorships, cooperatives, and even some small nonprofits.