We also school in a small space 🙂 We recently finished our basement and added a very small addition, which took us from 650 sq ft up to 1100 sq ft and it feels really spacious! But that’s for six, going on seven of us 🙂
We have a 30″-wide cabinet in the living room where almost all our school books are stored. It has doors, so we’re not always staring at math workbooks and random worksheets. There’s also a small bookcase for library books and bedtime read-alouds. Writing and art supplies are stored in cardboard photo boxes from Michael’s–they’re nice-looking enough to leave out without it feeling like “school stuff” is taking over the house. A couple desktop magazine holders on a small desk surface, along with the laptop. A book basket by the fireplace that holds my “teacher” books and school read-alouds. I also have a rolling cart from IKEA that serves whatever is our most urgent need–it’s held playdoh and coloring books for the littles, science or art supplies, reading materials, etc. It’s wonderful because it’s so easy to roll from room to room.
Don’t waste vertical space! We are working on hanging shelves throughout our house at about a foot below the ceiling, wherever we can. They’re great for storing materials or household items you don’t use all the time, and they’re above head-height so they’re totally out-of-the-way.
If you need to store your materials in another room because of space, make it a routine each night to pull out everything you’ll need the next day. If your kids are responsible for their own materials, have them do the same. That way you’re not running to other rooms for stuff during school time… that’s a big one that has helped me a lot.