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I would say take the shed, you'll find some use for it. I have contemplated this question also. I have a 20' x 11' basement shop, thats quickly loosing space. If you live in an area with a harsh winters (say the midwest), does it make sense to heat the shop through the week if you are only working in the shop on the weekends? Or do you run the heaters just when you are working in the shop? What kind of heaters are recommended (radient, wood stove, etc.)?
An excellent introduction to woodworking is to use crates as your main material. The boxes are already formed, which means less assembly work for you—yet it looks impressive once your project is altogether. With this crate coffee table, you still get to practice your skills adding the casters and the center box. Finish with a little stain, and this table is ready to roll. You can find the full tutorial at DIY Vintage Chic. 

Stop it. Really. I mean it. Pick a height between your thigh and waist that seems right. You’ll adapt. Don’t worry about your back. You’ll adapt. If you are really uncertain, make it a little taller and then cut down the legs. After a decade or so, your work habits will put a magic number in your head. You’ll have built enough furniture that you will know your number. Until then, pick a number.
When the holes were complete, I flipped the legs and drilled the countersinks with a 1" Forstner bit. Trying to drill a countersink when the center was already drilled would be impossible with a spade bit or an auger, but Forstner bits are guided by their edges, not their center, so they can handle this job. On thing about Forstners, though -- they have a tendency to skitter around a bit when starting, before they bite. An easy fix for this is to drill a hole through a piece of ply, and to clamp that to your work, creating a jig that will prevent the bit from drilling in the wrong spot.
WoodSkills and Norman Pirollo offer online woodworking classes, woodworking plans, video lectures and woodworking tutorials. The classes and courses provide detailed and comprehensive step by step sequences for woodworking skill-building. Each woodworking class and tutorial is based on actual furniture making expertise. As founder of  White Mountain Design , Refined Edge Design , WoodSkills and Pirollo Design, I bring to you two decades of knowledge in furniture making. In recent years, I have authored three woodworking books:

A steam box and a heat source are the two main components used to steam bend wood. Steam boxes must be able to withstand large fluctuations in temperature and humidity without breaking apart. In this two-hour workshop, students will build an optimized steam box that can last through the tough job of steaming wood, allowing them to continue creating their own projects at home!
Remove the jaws and route the edges that you could not route while they were still attached. Then use a roundover bit on all of the corners except the inner edge of the inner jaw of the end vise. Give everything a lite sanding, and apply Danish oil to the inner surfaces of the jaws. (By "inner surfaces", I mean those surfaces that will not be accessible when the vises are assembled - the inner surface of the inner jaw, that bolts to the bench, and the outer surfaces of the outer jaws, that bolt to the vise plates.)
2 - use a plunge router with a bottom bearing cuter bit such as this from rockler: http://www.rockler.com/product.cfm?page=25160&site=ROCKLER .... I thought to use the short one as I plunge it directly downward in the centre of the hole until the bearing reaches within the tabletop hole. I suppose one could use a long one, but the stubbiness seemed more practical (the big bearing ensured accuracy?)
Still in the building mood? Get free woodworking plans to build greenhouses, barns, pergolas, garages, dog houses, potting benches, router tables, playhouses, cabins, tree houses, gazebos, porch swings, picnic tables, swing sets, deer stands, bookcases, home bars, wine racks, decks, work benches, chicken coops, bird houses, benches, and even homes.
Synopsis: No room in the garage? Basement not an option? Consider what Ken St. Onge did when he needed shop space: He bought a prefabricated shed and converted it into his full-time woodshop. Because a pre-built shed doesn’t need a cement foundation and is built in a factory, it’s much less expensive than building an addition or stand-alone shop on your property. It can have taller ceilings than a garage and bigger doors than a basement, both big pluses for a woodworker. You can put a shed just about anywhere, too. Here’s a soup to nuts look at Ken’s experience, so you can gauge whether a shop in a shed is right for you.
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