This is a fundamental question. A good place to start is with a survey of your property. Most municipalities have a maximum percentage of your lot that you can build on and standard setbacks from your property lines that you will need to adhere to without needing to request special permission to build. On a photocopy of your survey you can draw in what your local setbacks are in order to define the location within which you will be permitted to build. In a best-case scenario, you will have the space to build without compromising too much on space or location; otherwise, you may need to request a minor variance, which would allow you to circumvent an obsta­cle such as a setback.
The table saw also works amazingly well as a table. Mine is big enough to not only hold stuff, but serve as an assembly table when necessary. The table of the table saw is set apart from other tables because it is commonly the only one open and available in the shop. I try to keep it clear enough to actually use, which means that at least part of the top is usually available and ready to be used as a table or maybe even a saw.
Your sense of space and how to use it will be slightly different depending on the focus of your craft. If you are building furniture with hand tools, you will be able to make do with less space (under 300 sq ft.) than if you’re using mainly power tools and building sets of cabinets (over 400 sq ft.). Some 3D mod­elling with a program like Sketch-Up or some 2D layouts on graph paper with scaled cutouts can allow you to experi­ment with arranging your space and how much of it you will need. You should include not only the tools, benches and storage that you currently possess but also enough room to tackle new types of projects and new tools that you antici­pate needing down the road. When you think you have a layout that works, test it out by mentally working through a range of different projects you might tackle and the needs you will have for material storage, assembly and finishing. Then revise as necessary; this process will allow you to hone in on a general square footage and layout ideas that will set you up to move forward.
These are all good tips, and apply to pretty much every shop. Like all things woodworking they need to be tweaked so that it’s right for the individual. For instance, I have a basement shop that’s not tiny but it is still space constrained, so worrying about the optimal layout for my ts/jointer/planer is a little off the mark since I don’t have to walk very far; instead, I want to be sure that related tools can be used *at the same time*. Having to move the planer out of the away so that I can use my TS is crazy if it can be avoided. However, interference between my drill press and my planer is less of an issue because they usually don’t get used at the same phase of a project.
Alternately, a detached shop can often be located closer to your property line and offers you a bit more freedom in terms of the type of foundation you can use. It may give you a sense of welcome separation from your home and open up yard space or allow a deck on the back of your house that would otherwise be lost behind your shop. In an urban setting, if you would like to have a wood stove in your shop you may find it more challenging to find an insurance carrier that allows one in an outbuilding. Also, outbuildings can be subject to more stringent height regulations than additions.

Efficiency does not always increase with experience, because as our woodshops grow older, they sometimes become unnecessarily rearranged or cluttered. And if you’re just now setting up your first woodshop, this shop layout should give you a great starting point. Each picture represents one half of a standard two-car garage. Click on the images for a larger view, and if anything is unclear, ask a question in the comments field!

Next come two options for the table saw’s trusty sidekick, the jointer, as well as for the thickness planer. Because it’s usual to work between all three tools when dressing lumber, the first option, shown in the illustration, locates the jointer nearest the saw to the right of its extension table with the planer nearby. As with the table saw, it always makes sense to align these tools with the shop’s long axis.
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