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updated 9/7/2012 5:17:24 AM ET 2012-09-07T09:17:24

Neutral-colored furniture with accent pillows and accessories doesn't overwhelm shoppers. An end table creates a divider between displays at Cocobolo Interiors in Armonk, N.Y. Credit: Tom Anckner

When Julie Owen bought Cocobolo Interiors in 2008, she set about adding more contemporary items to the Armonk, N.Y., shop. But with only 3,000 square feet, she struggled to figure out where to put her expanding line of furniture, lighting fixtures and accessories. Her solution: create sections within the shop and arrange the furniture the way customers might imagine it at home, using low bookcases and folding screens as dividers.

As Owen discovered, making the most of a small retail shop means being strategic about how you design the space and organize your merchandise. Here are seven other simple and affordable ways to maximize a small retail space:

1. Paint an accent wall. Painting one wall a bold color is an affordable and effective way to not only spice up the space, but also to make it look larger. A bold colored wall creates the illusion of receding in space, says Libby Langdon, HGTV design expert and author of Libby Langdon's Small Space Solutions (Knack, 2009). Putting colorfully printed fabric or wallpaper on one of your walls is another way to achieve the same effect, while adding eye-catching textures and patterns to your store.

Related: Creating Shops from Shipping Containers

2. Create window-like effects. Windows can open up a small space and make it seem larger. At Poppyseeds, a vintage decor and fashion accessory shop in Stanwood, Wash., the owners cut window spaces into the walls separating two small rooms to create a more airy feel. In another room, co-owner Marybeth Sande put white linen panels across an entire wall, creating the illusion of windows. Hanging drapes around tall, skinny mirrors is another way to create a window effect, Langdon says. "That gives an illusion of more light and movement in a small space."

3. Think vertically. Displaying items on various levels maximizes space and is visually appealing to customers, says Jerry Birnbach, a Somers, N.Y., store-planning consultant. Hanging shelving at different levels is the easiest way to achieve this effect. You also can mount drapes and other items from the ceiling to the floor to draw the eye up and create the sense of a larger space, Langdon says.

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4. Avoid a cluttered look. Owen managed to add more merchandise but avoid a cluttered look by using neutral colors, such as ivory and gray for furniture and larger items. She then accented the space with smaller brightly colored items like vases and pillows. She also makes sure not to crowd her merchandise too closely together. "We try to make it look elegant and give it some space," she says.

5. Move beyond shelving. Shelving can be a very effective way to make the most of your wall space, but you can also find more creative, space-saving ways to display products. Instead of a big floor case for jewelry and other small items, Langdon recommends buying an old painting in an ornate frame and stretching the canvas in linen to create a giant corkboard to pin products on. At Poppyseeds, tea towels are displayed on an antique wrought iron headboard propped against a wall. The headboard takes up little space and adds character to the store.

Related: 5 Ways Store Colors Can Influence Shoppers

6. Use open bookcases as dividers. Sectioning off areas of a small shop is challenging, but tall, open bookcases can be an effective way to divide the space, as well as display products and create an airy feel. Open bookcases are also flexible, allowing you to change both the layout and the merchandise easily.

7. Illuminate your space in different ways. Lighting is important in any retail shop, but it's particularly critical in tight quarters. If a corner of your store is not well lit, that square footage is as good as lost, Langdon says. She recommends using a combination of track lights, lamps, sconces and picture lights. This mixture will not only ensure that your entire space is well lit, but it also will add flair and variety. "Picture lights are amazing. They give a wonderful glow," she says. "Think in terms of layers of light."

Related: Reveal Your Retail Personality
 

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