Josh,

I have about the same 200 sq ft and it's not enough for all the equipment
and work space. Now granted, that space is probably greater than some
others have and I'm not complaining - but it's still not big enough by any
stretch of the imagination. When I added a drum sander, it had to go in the
garage, same with the lathe and my assembly area is also the garage (in the
warm months).

So what I'm saying, is go for the out-building but plan on using part of
your garage also. Layout your tool locations on a scaled grid and you'll
see that you'll fill that area with a TS, jointer, planer, BS, DP, DC,
workbench, mortiser, SCMS and clamps. It leaves minimal room for assembly -
if it doesn't fit on my bench, it goes to the garage for assembly and
glueup. You'll also be somewhat restricted on the lengths of stock you can
work with so be sure you have sufficient clearance front and back of the TS
blade. Most items you'll build (as a hobbyist) will most likely be under 7'
in length and that's the minimum clearance you will need front and back of
the TS.

Something I found out (too late) on building a shed was how you classify it
determines the max size. Since our codes will differ, I won't go into it
but check to see if you can't get a code variance to build larger (and
better) to enhance the property....

I'll leave how to build it to the experts.

Bob S.