Here are five steps I follow in making a space work (not in a hard and fast order):
Step 1: decide what you like and don't like about the space. In this case, I liked the flow of the space but didn't like the internal window towards the bathroom.
In this case, the dining table had to be changed now (not visible in these pictures). I decided that the sofas and rugs could be changed later.
What do you think?