The Blacksmith wants a proper shop to smith and work in. Once he has a sheltered bed inside his workshop, he can craft more items. A Workbench, some Building Blocks and a Construction Hammer are needed to build a shop for the Blacksmith. You will first need a Workbench. Craft and place a Workbench from your Manual Crafting tab. Crafting a Workbench requires String and Wood Logs.

The Workbench can be used to craft many rudimentary items. Use it to craft Rough Wood Blocks or Rough Stone Blocks for the Blacksmith. These building blocks are necessery to build a shop for the Blacksmith.

The new building blocks can be placed with a Construction Hammer. The Construction Hammer can be crafted in the Manual Crafting tab or with the Workbench. Placing the building blocks is necessary to build a shop for the Blacksmith. Once the Blacksmith has a sheltered bed inside the workshop, he will be able to craft more equipment.

The only thing your Blacksmith needs now is a sheltered bed. Grant him access to a nearby sheltered bed if you haven't already! To shelter your survivors, craft a suitable bed. Place the bed in a protected area easily accessible by survivors. It will automatically be assigned to the nearest free survivor upon being placed. If you wish to re-assign the bed, equip your Summoning Staff and use it while aimed at the bed. This quest will reopen to notify you once your survivors are no longer sheltered.