Most families essentially live and entertain outside during the warmer months, transforming the patio or deck into outdoor room where the kids play from dawn to dusk and the parents hang out and relax. (What a wonderful concept!)
1 The Adult Entertainment Area.
This part's a breeze. All you need is a party table and some comfy chairs.
Top off with an umbrella for shade, and your party place is open for business.
Optional furniture: a storage chest for adult stuff you often use outside, such as sunscreen, hats, and bug spray; or folding tables by the grill for serving and cooking. An ice chest would be nice, too. Steaks, anyone?
2 The Kids' Deck Zone.
For safety's sake, set the party play area away from the grill and the dining table. You might even want to make the kids their own little outdoor room delineated by container plants.
I have a sturdy kid-size table with chairs in the family room that's easy to take outdoors for just such occasions.
Keep favorite toys in a wheeled container or a wagon so kids can roll them outside to play.
Or, consider a deck storage chest for them to use as a toy box. Another way to keep the yard both tidy and ready for action is to provide accessible toy storage in the kids' corner of the garage.
Provide protection from the sun with a "ceiling" (umbrella or awning), a "floor" (a quilt, splat-mat, or old blanket), and "walls" (some sort of barrier such as container plants, toy chests, or fences) that will keep them from wandering off. (Or at least slow them down.) The older kids might want more privacy, but keep the little ones in view.