Once the workshop location is determined, it's time to begin planning how to lay it out. First, acknowledge the need to formulate a plan that's realistic in terms of the space allotted. The size of the structure or workspace will place some constraints on how much can be done. Taking into account size limitations, begin fashioning a plan that keeps efficiency in mind.

When you design your workshop setup, climate control often gets ignored — and that’s a huge mistake! If your workshop or hobby room is in an unconditioned space like a garage or basement, you could find that it’s brutally uncomfortable to work in there during warm weather. You’ll be much happier with a solid fan — or several — to keep air moving for your comfort.
This will be a personal matter, depend­ing on whether it will be helpful for finishing or sharpening. However, it is a good idea to look beyond your current use of this space to the next owner. Would it be beneficial to add plumbing hookups so that the shop could someday be an apart­ment, or an art studio, or an extension to your house? It could add to the resale value of your house to be able to create as flexible an area as possible by roughing in a bathroom and even a kitchenette area if you can. If this is done when wall cavities are open or before the slab is poured, your forethought could pay dividends but not cost much up front. 
Much like the assembly table, nearly every project in my shop makes extensive use of the table saw. And like it or not, my outfeed table becomes a second storage area for project parts and cut-offs. So I like to have mine located in the middle of the shop for the same reasons as the assembly table. Additionally, it’s nice to have ample space around the tablesaw for those larger workpieces. Unless it’s absolutely necessary, I’m not a fan of storing the table saw against a wall.
Click the image at right, and start building the ideal workflow at the bottom where you see the first red arrow. This arrow crosses through one roll-up door of a typical two-car garage. Note that if the right-hand window were not present, you could place lumber storage closer to the entrance, which would also allow for easier passage onto the jointer. Work flows from the jointer to the planer and the table saw, then ideally onto an outfeed table near position #2 in the diagram. From #2, proceed left to the assembly area (pictured below).
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Finally, as I shared in my post last week on how I learned woodworking, I learned how to use power tools by watching YouTube videos and then just trying them out for myself. I highly recommend this method to learn how to use your power tools. There are lots of videos on specific models of tools too. So, watch a few how-to videos and very importantly, review the tool manual and safety guide for your own tools. Then, go ahead and try the tool out yourself and start using it!
Let’s face it, one of the most significant costs of your shop will be its foundation. While you’re at it, what about adding space above your shop? There may be regulations preventing you from building living space above your shop if it is in an urban setting or in an outbuilding, but there may be some flex­ibility depending on where you live. It is in the municipality’s interests to encourage infill housing that uses existing infra­structure. At a minimum, think about including attic trusses to create some space above your shop for drying lumber or storing equipment. Access could be from simple pull-down attic stairs or from the exterior if you don’t want to lose floor space to a stair or ladder. If you’re creating an addition to your house, you may be able to add a couple of rooms you’ve always wanted, such as a family room, office or in-law suite.
In addition to sheer power, look for a model with a built-in thermostat so you can set it and forget it. This convenience feature is well worth it so you don’t have to stop what you’re doing mid-project to manually turn your heater on and off to maintain your desired temp. A good garage heater will mount to the wall or ceiling to save space and will come with a durable housing and full safety screen to keep dust and wood chips from reaching the heating elements and starting a fire.
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An interesting variation of this layout is displayed in Jim Tolpin’s shop, shown in the photo at right. Tolpin located his jointer to the left of his table saw, its height low enough to allow panels cut on the saw to pass over the jointer. To save space, his portable planer lives beneath the saw. All three tools are oriented toward the garage-style door, which can be opened to allow long boards to be ripped, jointed, or thickness planed.
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