It is best to find the room that suits the sound you are trying to achieve from the beginning of the recording process. The smaller the room, the smaller and tighter the sound will be; this is not necessarily a bad thing. Small tight rooms can be good for vocals, guitars and percussion if you are going for a tight clean sound. Larger rooms have more air for the sound to travel in, so it will be in fact a bigger more open sound. The sound has a longer travel time for the sound wave to move, therefore the reflection from the walls will take longer to bounce back creating a bigger more spacious sound. The decision of size and sound has to be made early on before the recording starts. One advantage that a larger room will have is the ability to be scaled down by closing up the room using modular baffles or gobos (go betweens). Gobos are structures that are partitions, that help to block sound by placing them in between the musicians, instruments, and microphones. Placing the gobos around the microphone at a close distance will help a large room with too much ambiance sound smaller.
This will eliminate the reflections coming off of the walls that are further away.
Small rooms can produce big heavy tight sounds with the absence of the decay from the reverb that is caused from big rooms. Sometimes a large room can sound like it’s washed out, or far away. With a good engineer any room can sound amazing with a little adjusting. A poor sounding room can be manipulated to sound good, although it requires much more work and time. Deciding on the proper room size for your needs is critical to the sounds that get re-produced. This will highly dictate the type of sound the microphones will pick up.
Clapping your hands in a room can give a good representation of what a room will sound like. The reflection coming off the walls will be picked up by a simple hand clap. The true test is to try out some instruments or vocals and position them in various sections of the room until reaching the optimum sound quality. If one side of the room sounds bad try a different spot or move around into a corner until the sound is improved.
Experimenting with different sections of the room also keeps the sound fresh when recording many instruments. If the acoustic guitars are recorded in the center of the room, when the time comes to record the electric guitars you may try recording them in a corner of the room for a different room sound. This gives clarity on the final mix creating separation and providing more distinction on various sounds.
If you are starting your own studio, remember that the bigger the studio the higher amount the bills will be. The benefit is that larger studios can charge more for their studio rates.