Setting up a woodworking shop is a good way to pursue a hobby or to begin a business. Woodworking can produce all manner of objects, from the strictly utilitarian to the wildly whimsical. It can provide you with furniture, kitchen implements, tools, and household fixtures. If you make the effort to promote yourself and have the talent and the luck, it can also provide you with a decent income. When setting up a shop, an important rule is to avoid cheap tools. Buy the best you can afford and take care of them.
Prepare a Space
Use a garage, barn, outbuilding or rented space if you can. Your basement will work, but due to the dust and noise that will be connected to your living space, it is not the best choice.
Clean out the space and arrange it to make the best use of whatever space you have. Check the suitability and condition of electrical connections and upgrade them as necessary.
Install a woodstove if you need heat. Heating a woodshop with scrap is a practical and money-saving way to stay warm in winter.
Acquire Good Tools
Buy a high quality table saw. Used is as good as new if it's good quality and has been taken care of. Build the shop design around the table saw; as it will be your most frequently used tool.
Buy good tools as you need them and as you can afford them. Don't waste your money on piles of tools because you read about them in a book. Tailor your tools to your personal needs by not buying something until you notice its lack; this is an indication that it is actually a needed tool.
Look for older tools in newspaper ads or online tool websites. Buying old tools will get you more tool for less money. If you buy new, do not buy cheap tools. You will regret it.
Start Collecting Lumber
Buy lumber when you find it, rather than as you need it, if you have the space to store it. Buying lumber at auctions, estate sales, or used, through newspaper or internet ads, rather than buying piece by piece at a premium from lumber retailers, can save you a huge amount of money. Buying rough lumber and jointing and planing it yourself is more work, but will also save you a lot of money.
Design a useful and practical lumber storage system in or next to your shop. Have one place for full sized, unused lumber and another place for the many bits and pieces that you will start to accumulate. View these scraps as a resource rather than a hassle. Keep them organized and at hand and they will be very useful.
Look into having lumber cut from logs if you live on a property with a wood lot. Hiring someone with a portable mill to mill up an oak tree can get you thousands of dollars worth of lumber for a relatively small price.