Building a tiny house is about being able to plan for what is truly necessary. An extra bedroom, a second bath, a separate dining room, kitchen, and living area are not going to be part of the plan. Most tiny houses are small enough that they could be considered efficiencies with loft bedrooms. The limit on the amount of space available makes it essential when planning a home on a small lot to ensure that everything truly needed fits the space. It can be a time when people are quite creative, but it can be frustrating as well.
A tiny home needs essentials such as a place to sleep, a place to cook and eat, an entertainment space, and it will also need a full bathroom. Some storage will be needed for things used on a regular basis such as clothing, dishes, and the cooking utensils. Other than that, anything else might be superfluous. Knowing those are the needs, they must be put in the plans before any additional considerations can be discussed.
Outdoor space is often larger than a tiny house, and it can play a large role in helping make the small space liveable. An outdoor shed can contain many items that would normally be stored inside a home for convenience. A patio with a grill could be the perfect entertaining and cooking area as long as the weather is nice, and it could allow the residents an opportunity for friends and family to gather. Even placing a few chairs outside around a fire pit can make life good.
It can be frustrating to move from a home with large closets to one where no more than a dozen items can fit into one will be considered adequate. For those used to entertaining large crowds, learning to scale down to a few guests at a time can be frustrating. Finding out that the refrigerator holds a third of the food of a normal one can even be a frustration that needs to be accommodated.