My shop is located in a small detached garage built in 1918. When my wife and I bought the house the shop had a tiny servants quarters/apartment that took up half of the garage. I decided that the work space was more important than the extra living/office space. A friend and I tore out the apartment, reinforced the walls with steel cabling, and poured a new concrete floor over half the area. The result was a workspace that has served my needs nicely. There is a small amount of tension between my wife and me when the house overflows and she says "please take this out to the shop". We've pretty much solved this problem with "his and hers" storage areas which include a Rubbermaid cabinet and plenty of large plastic storage containers.
Main Work Area - right side bench is for grinder, blade sharpener, chop saw, drill press & jig saw. I also have a radial arm saw, which is located at the left end of the bench (just out of sight).
Right side storage area. Includes band saw, sander, planer, joiner & table saw. Most of my tools are on wheels so that I can roll them outside. This cuts down on dust in the shop.
Carving bench - chisels are hung using magnetic strips.
Hardware storage area. This is one of my best ideas! I previously stored all of my hardware in small storage boxes with plastic drawers and could never find anything. I probably spent $250 on this project (to house $100 worth of hardware), but it is money well spent. I'll never make another trip to Home Depot to buy hardware that I already own!!!