The Short Answer
How Do You Plan a Home Theater?
Plan a home theater in this order: the room, the seats, the screen, the sound, the wiring, and the gear last. Decide first whether it is a dedicated room you can darken or a media room that shares space with the house. Then set the seating, because the distance from the seats to the screen wall sets the screen size: for a 4K picture, sit about 1 to 1.5 times the screen's diagonal away. Pick a projector if you can control the light and a large TV if you cannot. Choose the surround format (5.1, 7.1 or Dolby Atmos) and the speaker types: in-wall and in-ceiling for a clean dedicated room, on-wall, bookshelf or tower where the walls stay closed. In a new build, the low voltage wiring goes in before drywall, and the speakers, projector and screen go in after. Finish with dimmable lighting, simple control, and calibration of the picture and the sound.
The order matters more than the budget. Get it right and a modest system feels like a real theater. Get it wrong and the best gear still feels like a TV in a spare room.