As always, design clearinghouse Apartment Therapy is all over this one. The pic above is from a reader who shared his "pop-up" balcony dining area (The Amazing, Teeny-Tiny Pop-Up Balcony). The tables and benches fold up when you need space -- and also eliminates the possibility of knocking a chair or table over the railing. AT's also got a ton of links and inspiration for ya. You know how much I like "thinking up," and that applies to outdoor spaces as well. I love their tips about using shoe racks to hold potted plants, building a lattice for plants to crawl up, and using wall-mounted plant containers.
10 Ideas for Tiny Balconies
Making the Most of a Small Outdoor Space
10 International Outdoor Spaces
And if you've got the space, you've gotta take full advantage of it! Channel your inner caveman and cook some meat over fire! (Sort of related: there are tons of food trucks here in Los Angeles, which park in various spots around the city, announce their presence via Twitter, and offer really well-made food. My favorite truck, based on name alone, is the Metallica-themed "Grill 'Em All.") Once again, Apartment Therapy is on the ball, offering a roundup of "Mini Grills for Urban Barbecues."
Though the grills in the roundup are pretty sweet, this next one turns it up to eleven. (Which is one more than ten, innit?) Unclutterer found this amazing grill by the French company Focus. It freakin' folds into the wall when not in use. The site says that the metal dish affixed to the wall prevents any smoke from damaging the wall, but still... Make sure the coals are cool before folding up.