Choose your Seating Wisely It's best to admit right off the bat that a smaller living room won't seat all your friends at once, and not try to cram in a sofa and multiple armchairs. In fact, forgoing the sofa entirely can work well; a selection of armchairs is far more versatile. On the other hand, a small space doesn't necessarily mean small furniture is best; sometimes a larger sofa (or even an corner one) which dominates the space works just as well. The trick is to think about how you use the seating in your living room.
Edit your Technology These days almost everybody has a flat-screen TV (if they have one at all), which is great news for down-sizers. A slim, wall-mounted television saves valuable space in a small living room. But what about all that other home cinema technology? If you can get on board with using a web-based movie service like Netflix or Apple TV, you may be able to do away with the bulky DVD player. Also consider a slim but powerful speaker dock instead of a larger sound system.
Coffee table vs. Side Tables I sometimes think that we've been conditioned to think that every living room needs a large coffee table front and center. But a couple of small side tables, or better yet, a set of small nested tables, can do the job just as well in a smaller space. The shape of the room and the way traffic flows through it will dictate which table option works best in your space, but you probably don't need both.
Light it Up Ideally a small living room would have a ceiling fixture, so choose a pendant which is both visually striking and gives off a lot of light. Table lamps take up valuable space (and you don't have tables to spare anymore, remember?) so if there's no possibility for a pendant, a floor lamp or two is the next best thing.
Be Creative with Storage Downsizing obviously means getting rid of many possessions, but you're still going to need some storage. Using all your vertical space is a good option, as are storage ottomans and chests which double as tables. Once your storage is in place, it's best to operate a one in, one out policy for books, knickknacks and other things which tend to accumulate over time. (Images (all via Apartment Therapy): 1. Shelby's Sophisticated Studio Loft 2. Liz's Durham Digs 3. Blythe's Bohemian West Hollywood Cottage 4. Bridget's Clean & Current in North Brooklyn 5. Joanna & Gerry Collectively Maximize Their Small Space 6. Alexis' Cabinet of Curiosities)