There's a trick to building small.
You don't just shrink everything down.
Naturally, you'll have to eliminate some things you may be used to enjoying.
But, for the most part, it's about giving up the things that just aren't that important to you any longer.
Yet, you should consider resale value.
Can you make the home small and still desirable to a wide audience of buyers if the time comes to sell? Question: How do I maximize my benefits while still building a small home? Answer: Small house design means ...
well, you're going to be building a small home! But, it doesn't have to feel small.
I think that is a big part of this question.
How do you make a small home feel big or at least comfortable and efficient? Small home require better design.
It's not going to happen by accident.
Clever, experienced architects and home designers can make the most of every inch of the home.
There are probably hundreds of ways to make a small home more usable, comfortable, and efficient.
Here are some ideas for the design of a small home:

1. Have at least one room extend from one exterior wall to another.
   
2. Reduce or eliminate hallways
3. Have plenty of windows to bring in light and offer views
4. Add space or "volume" in the home with higher ceilings
5. Create shared rooms or multi-purpose rooms
6. Keep the interior open and flowing
7. Create easily accessed attic storage

As you can see, these are all ways to add the feeling or appearance of space, or to maximize the use of space.
Interior Designers Help Finally, and this doesn't really have to do with the design, but to make the home more livable and feel bigger, be wise with your furniture purchases.
Mainly, don't overdo the furniture.
A good Interior Designer can be very helpful with furniture and other décor.
Try to make decisions based on the notion that less is more.