There's an old saying in furniture circles and it goes something like this: When is a room not a room? Answer: When it's an extension of your personality.
Are you purchasing furniture for a room in your own home or office, or doing it for someone else? Either way, your approach will need to take personality and taste into account. Other considerations include: light and space, the type of room (lounge room, living room, bed room, office, dining room etc.) and the functional furniture that must be included in the room before you start adding other items (Cabinet, entertainment unit, etc)
Spend some time.
When you understand your room, you'll make better decorating decisions. Take the time to sit in the space and - if possible - watch how it is used. Of course it's important to measure the room (see below) and plan the practical aspects of furniture choice and design, but a little time spent just being in the space and learning to understand it in a deep, quiet way will give essential clues for how to proceed.
Measure for success.
Practically, measuring the room is one of the most important ways you can ensure you create balance and optimise the space. Simply viewing the room may provide misleading information as the placement of furniture, doors and windows can create optical illusions that give a false impression of relative size and distance. Measure the area (floor space) but also consider measuring ceiling height, distance between doors and windows, the height and width of a fire place. It's a great idea to map your measurements onto graph (or grid) paper to ensure you have the room in proportion. This also makes it easy to mark furniture and through ways on your 'map' and get the balance of your room just right.
Understand the flow.
How do people naturally move around the room, into it and out again? How many doors are there? You'll want to avoid putting a sofa in the middle of a natural flow, and understanding the room's movement and rhythm will also allow you to make good decisions about where to place furniture and guide the eye.
Work with natural light.
How will the light fall in the room? It's important to work with the natural aspect of any room and that includes taking care to ensure you've arranged your furniture to make the best use of the light at any time of year. This can have an enormous effect on the success of a room. For example, in a TV room, try to ensure that your entertainment unit doesn't catch the afternoon sun as it will make the TV screen hard to view.
Create a focal point.
A focal point will draw the eye and create a clear statement about personality and style. In a bed room the eye is normally drawn to the bed as it's usually the largest piece. However even here you can distract the eye to a feature artwork or chair. A focal point is equally important, whether you're working with a lounge room or an office, a bed room or a TV room.