Living and working in 70 square feet was not something I originally planned to do, it just worked out this way, and surprisingly, once I decided what I had to have in the house in order to work and live, it was relatively simple to fit everything that was truly necessary inside while the rest of my "stuff" was placed in storage until a small separate workshop building could be completed. My first act of rebellion against the accumulation of "stuff" started off long ago with what I dubbed "the Zen closet" as I required it to remain empty.
In preparation for my smaller accommodations, a much more radical approach was necessary: I moved out of most of the house I was living in, downsizing until everything could fit in one 280-square-foot room.
For people who are really serious about downsizing, I recommend you pick a room or closet in your house and move out of it, get rid of stuff you don't need, find better ways to store the things you want to keep. Visit boat and motor home shows, you will find lots of free ideas and examples of how to fit things into limited spaces (things which people were paid large sums of money to figure out!). Remember that things which are rarely used can be placed in areas which are harder to get to, since you won't be using them that often. Keep repeating the down-sizing process, picking another room or closet until you feel you've reached your limit. Live with these changes for a month or so, and you will find ways to improve the layout and make the space utilization even more efficient. You will be surprised at how much more workable things become. After one or two months are up, try downsizing again. Keep repeating this cycle until it becomes not just uncomfortable, but impossible to work with anymore, at each stage getting rid of what you don't need and finding better ways to make use of the limited space you have. Once you find it completely unworkable, live with it for a few more months, then upsize just a little (add a closet or part of a room), and you will likely find this space is far more comfortable and livable than you would ever have imagined was possible before you started.
You might also be interested in a new article Downsizing 2 - Take a Hike.