You don't need a warehouse to stay organized. With a well-thought-out wall, a small workshop performs like a large one. Here's how I set mine up in exactly two meters and what I learned about grouping, hanging, and buying supplies without stockpiling too much.
Why I stopped stacking boxes
For quite a while I kept my tools in plastic boxes and buckets, stacked one on top of another, against the back wall. The problem wasn't a lack of space: it was that every time I needed a specific screwdriver I had to empty half a box, and when I finished I put everything back in the same jumble. I spent more time searching than working, and on top of that I kept buying duplicates because I didn't know what I had.
The change started with a simple decision: choose a single two-meter wall and treat it as if it were the entire workshop. If something doesn't fit there, it doesn't fit. That restriction forces you to prioritize, and prioritizing is half the work of organizing.
The wooden panel and how I mounted it
I used a medium-density fiberboard panel measuring one meter eighty by sixty centimeters, screwed to the wall with plastic anchors and long screws, separated by a few centimeters so air can pass behind it. Before fixing it, I marked the base line with a pencil and checked it with a level, because a crooked panel shows as soon as you hang the first tool and afterward there is no way to hide it.
I did not glue it to the wall or leave it resting on the floor: I wanted to be able to take it out whole if one day I need to move it. The screws go in four points, two at the top and two at the bottom, with wide washers to spread the load. If the panel is large, it is a good idea to add a horizontal crossbar in the middle, especially if you are going to hang heavy things like clamps or a small vise.
Group by trade, not by size
The first criterion I tried was to sort by size: big things at the bottom, small things at the top. It did not work. I ended up mixing the bike wrench with the electrician's pliers and wasting time again. What did work was grouping by trade: one section for light woodworking, another for basic electrical work, another for bicycle maintenance, and a corner for welding and metal things.
Within each group, what I use every day stays within arm's reach, between chest and eye level. What comes up now and then goes higher or lower. And what I almost never touch goes straight into the drawer. That frequency rule has saved me more arguments with myself than any labeling system.
What I hang and what I keep in a drawer
Everything that can hang on its own goes on the wall: hammers, combination wrenches, pliers, screwdrivers in a row, hand saws, tape measures. Metal hook strips are cheap and easy to rearrange. For pliers I use a rail with individual hooks, so I can take one down without disturbing the rest.
Small things that get lost or roll away go in a drawer: drill bits, screwdriver tips, assorted screws, bushings, washers, short cables. That's where it pays to separate things with small inner boxes, even if they're just cardboard dividers. What I never leave hanging are cutting tools with exposed edges or bottles of liquids, because one bump and you've got a problem.
Buying in bulk or by the unit
Over time I learned to distinguish two types of supplies. The ones that get used up evenly and are always needed, I buy in bulk: screws in common sizes, wall plugs, Teflon tape, spare saw blades, electrodes. Buying little by little each time costs more and forces you to stop work to go get more.
The ones that are used rarely or are specific, I buy individually, even if they cost a bit more: an odd-sized drill bit, a special glue, a particular quality solder. Stocking up on those ends in expired jars and drawers that won't close. The rule that works for me is simple: if I used it three times in the last month, it goes by quantity; if not, by unit.
What I still haven't figured out
The two-meter wall has a real limit and I accept it. When the workshop grows, the wall doesn't grow, so every so often I have to review and remove things. What I do is set aside a box with what I haven't used in months and see if I miss it. I almost never miss it.
If you're just starting out, don't build the whole panel at once. Hang what you use this week, live with that for a few days, and then add more. Order sorts itself out when use leads the way, not when you draw it on a plan.