(floor plan of Rebecca Omweg's apt courtesy of Domino)
Step #2. Determine Function For Each Area/Room
you'll need: pad and pencil
Now that you've written down all the things you would like to get out of your space it's time to think about how you're going to make this happen. In smaller spaces, things may have to do double duty like getting a large table that can be used for dining and as a work space for crafts or using a computer.
Keep in mind how often you will actually do something, like having overnight guests. Some think that having a pull-out sofa is the only option, but have trouble finding one that's comfortable and looks nice, or they may already have furniture that they don't want to replace. Aero Beds are a great alternative and can easily be tucked away in a closet.
This isn't about planning things out completely, it's just to get you thinking of your space in a different way. If you get stuck don't fret, things will become more clear as you go through the next step edit and sort...