You asked, so I will chime in.
1. Offer something unique... A "signature engine"...something no one else is offering. For example: a 1/2 HP vertical, air-cooled....(no water-jackets, no radiators, no extra cooling fans)...propane engine. Hit and Miss, no timing gears, ratchet indexer for exhaust valve. Like the Olds, Vertical Gearless....but far less expensive!
2. Keep the casting to a minimum....only cast the essential components. The rest of the fabrication should be from bar-stock, and odd pieces, common fasteners, standard spark-plugs, wires, points, etc.
3. Perhaps develop a "convertible" engine. Same bottom end: crank, frame, and swap on different cyllinders for steam/compressed-air, gas, vacuum, etc. Sell component, add-on, parts, for the conversions in packages. Offer the engine in a basic configuration, but sell it as a 'convertible' engine. There once was a company who sold castings for this kind of convertible engine, but I don't know if they are still in business. They sold a horizontal engine.
4. Develop castings for a 1/2 - 1 HP two stroke, vertical, air-cooled, one, or, two cylinder, piston-ported, engine. Transfer porting can be external, (essentially a cast iron/brass plate with passages for transfer) and mounted to the cylinder- like vintage, airplane engines, and so could the carb. set-up. So you will cast the crankcase... cooling fins...maybe, the crank.... transfer port, exhaust manifold, carb. mountings and timer mechanism. Cylinder: common steel tube, or cast iron. Everything else bar-stock.
This is just MY wish list, my fantasy in a perfect world. Consider nothing listed here, that is unrealistic. Money is hard to come by these days, and it's gonna get worse. I look for the most bang for the buck.
Good luck, and may you be prosperous.
Frank