My husband likes to mock-complain that my kitchen storage has taken over more and more of our house. Not content with our narrow kitchen cupboards, I converted a coat closet into a bright pantry, and then turned my attention to the dining room, where a big red cabinet and a sideboard now hold most of our dishes and glassware. I admit I may have a dish problem (I have the excuse of buying just one more "for work!") but that aside, I have found that the a small kitchen is often not the best place to store dishes anyway. Where do you store your dishes?
Taking the dishes out of the kitchen is one of the best ways to open up some space in your kitchen cupboards for dry goods storage and other things that need to stay closer to the heart of where you cook. Many cooks with small kitchens do this: Put a sideboard in the dining room, move the wineglasses, get a china cabinet.
The other benefit to this simple rearrangement, of course, is that it lets you see your dishes, if you use a glass-front cabinet. I like my dishes, especially the serving pieces. I like having them on display in my red china cabinet. It keeps them out of the way in the kitchen, and it uses otherwise empty space in the dining room.
Also, by the way, our cabinet is from IKEA. It's the LINNARP cabinet with two glass doors.