How do I begin to lay out floor tile in a small bathroom?
In the case of a very small bathroom I tend to lay the tile out on the doorway, where the pattern and position are most conspicuous. I usually center either a tile or a joint. In the case of 12" tiles this is even more impactful, as an off-center doorway catches the eye.

Then, lay out tiles in both directions and see how they interact with walls, plumbing fixtures, and cabinetry. 

Almost any project should be undergone with this approach--ask yourself what will be seen and noticed most often, and make compromises where necessary to fulfill that goal. In this case, the number of cuts you have to make for a project intended to last many years is irrelevant.