About 80% of your filtration is your live rock, the rest mainly comes from the protein skimmer and refugium (fuge). Ideally you will have a sump, this is the best place to put your skimmer, fuge, heater, and if you include them it is perfect for media reactors, auto topoff, etc. The best sumps are made from a standard aquarium, usually the largest that will fit in the aquarium’s stand. They are cheaper and can be made To fit any skimmer, pump, etc. Prefabricated acrylic sumps are expensive and do not allow for customization.
Your live rock is a vital part of the system you are creating. It is more important that the rock you get is of very high quality (lots of diversity on it) than that you buy more live rock. What I mean is that although you should aim for at least 1.5-2 pounds of rock per gallon, it doesn’t have to be all live rock. You can supplement the live rock with dry base rock to reach that 1.5-2 pounds per gallon. I suggest at least 20% of your rock starting as actual live rock, the rest of the rock will become live with time. Make sure the actual live rock you but is high quality with lots of diversity. If you have a wider tank I (highly suggest one at least 18″ wide instead of 12″ wide) try to have as little rock leaning against the back as possible, definitely make sure you can look from the side of the tank behind the live rock and see down the entire length of the tank along the substrate.
It is very important to have flow all around the live rock, it can’t do its job as well if there is only flow on one side. The only powerhead I had in my reef was blasting water behind the rockwork. Many people add pumps that just blast away at the front, but forget to make sure there is sufficient flow behind the rockwork, which causes the live rock to be a less effective filter.
The sump is a very helpful part of a reef system. Although you can get hang-on-back refugiums, skimmers, and even skimmer/fuge combos, there are many benefits to a sump. For one the overflow box will drain water from the surface, keeping it free of any filmy buildup. The sump adds volume, creates a safe place to add things (like top off water or chemical supplements if needed). It is also a great place to keep almost all your equipment (heater, skimmer, fuge, media reactors, auto top off, anything else you want to add).
The overflow is ideally drilled into the tank so that you don’t have to worry about creating a siphon for the overflow box, losing that siphon when the return pump from the sump is off, etc. I highly suggest you make your own sump. Buy the largest tank that fits in the stand and install the glass baffles yourself. This allows you to make the sump that fits you and your tank the best. It also allows for more flexibility in the future.
Use dark materials as much as possible in the sump. I recommend smoked glass for the baffles in the sump and black vinyl tubing instead of clear for things like the return line back up to the display tank, media reactors if you end up adding them, etc. This keeps algae from growing in places outside of the refugium. I had coralline algae growing inside my tubing for my media reactors before I switched to black tubing.
Start with RO/DI water and use a high quality salt mix (Reef Crystals, Tropic Marin, etc.). Don’t worry about getting a live sand, these are at best wet sands with an additive equivalent to Cycle or Stess Zyme. I prefer black sand so I used Estes’ Ultra Reef Black, but if you want white or a mix use a calcium based substrate.
Paint the back of the tank. This will look the best. I prefer black, it shows of the colors the best and actually makes the fish create more pigment in their skin, not just look better. Lighter colors can make their colors wash out, and look worse when even a little algae grows on them.
When you add the rock it will have to take time to cure, which will cycle the tank. Monitor this as usual (watch ammonia and then nitrite go up and then back down to 0ppm). When the nitrite is back down to 0ppm do a big water change (usually at least 50%) and then you can slowly start stocking.
It is best to have a list of all the fish you want before you start stocking and add them from least aggressive to most aggressive. You can start adding certain corals from this point as well. Start with the hardiest and move up to more demanding corals. Zoanthids and mushrooms will go first, then LPS, then SPS and clams if you get to that point.
Keep up a healthy water change schedule even if the water looks good. I recommend 10% each week and if there are problems increase the frequency, not the size. Things that would warrant this are increased algae, death of anything, stressed or ill anything, basically any issues at all can be improved with water changes. Water changes will prevent and fix almost all problems people usually encounter.