When I was just getting started in woodworking, my kind wife bought me a small table saw. To my beginner's eyes, this $300 beauty was all the saw I would ever want. I built some great projects with that small saw, and it was good way to dip my toes in the hobby before diving in. Eventually though I came to realize that bigger saws had more to offer than my little direct-drive universal motor saw could provide. I became expert at rattling off the benefits to my wife: the added power of a larger motor, the extra weight of a larger saw to combat vibration, the accuracy of a better fence, the dust collection allowed by an enclosed base, and a larger table surface than my starter saw provided. When a deal popped up, I eventually sold off the saw to a co-worker and upgraded to a Craigslist Grizzly cabinet saw.
In the meantime though, I did try to improve the performance of my starter saw. There are a few good ways to do this. Zero clearance inserts - though the small Delta I had used a weird 1/8" thick plate so I had to make my own. A better blade was a no-brainer, and I became a fan of the Forrest Woodworker II, thin kerf version of course. A blade stabilizer didn't hurt with the thin-kerf blade either. Also, don't overlook the benefits of a good tune up to make sure the saw is aligned properly - miter slot parallel with the blade and fence dialed in just right. I even flattened the arbor washer on a piece of sandpaper to squeeze every last bit of juice out of the saw.
One thing I thought about doing, but never got around to was making a larger enclosure for my small saw to sit in. You may have seen these around the web, and even Norm himself made a version on The New Yankee Workshop. This type of extended table enclosure adds table surface and mass to a small saw, and it could help with dust collection also. Fancy versions may even have a better fence, adding accuracy to the setup.
Proving that there aren't many new ideas, here is today's Blast From the Past - click for larger versions of the plans.
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Did you have a similar experience with upgrading a "starter tool"? Is there a tool you currently have that you want to improve? Let's hear about it in the comments!