Purchase a prefabricated shed for your yard. The size and style are at your discretion, but consider all that you'll be doing in your new studio and make sure the shed you purchase will be conducive to those activities. The shed can be insulated and dry-walled, carpeted and even wired for electricity, depending on your budget. An alternative to wiring would be to run a single line from your home to the shed, although you should consult an electrician before doing so.
Set up lighting in your new studio. If you've had your shed wired for electricity, you can install track lighting or another overhead lighting option. If you're running a line, lamps are a better option. If you've chosen not to run electricity, you'll be dependent on natural light and battery-operated or kerosene-fueled lighting. Using your studio for artwork means you'll need sufficient lighting, so factor that into your budget from the beginning.
Set up heating and air conditioning for your shed. Space heaters can be used for heating, and window units are an option if your shed has windows. Fans are also an option. If you choose not to use air conditioning, you should strongly consider purchasing a shed that has windows for ventilation, especially if your artwork involves using materials that produce fumes or strong odors.
Purchase shelves for your studio where you can store your supplies. Metal racks are ideal for an artist because they'll stand up to spills and stains.
Include a desk and chair in your new workspace. Whatever your medium -- paint or clay, for example -- you'll need a place to sketch, write notes and keep paperwork. Make sure you purchase furnishings that will hold up to your artwork if it's particularly messy. For example, a plastic or vinyl seat on the desk chair would be a wiser choice than one covered in cloth.
Stock your garden studio with any supplies you'll need. For instance, painters will need an easel in addition to a desk. Try to stock your workspace with everything you'll need to eliminate unnecessary trips back to your house for supplies.
Decorate your space. A few prints or even a simple vase filled with flowers can really brighten up the space, keep things feeling fresh and spark your creativity.