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There are several options you might select to create a "usable" outdoor area for you, family and friends.
1) Have a concrete pad poured to extend the current pad you have or to create a new one. These are durable and last decades with the minor issue of possible cracking.
2) Create a backyard stone pad. Stone pads look great and don't have the cracking issues of concrete pads.
3) If cost is a major issue, create a pebble or gravel area. Although it's not the best idea to walk on barefooted, it does create a flat area for a picnic table or beach chairs for example.
4) A gazebo is a wonderful way to create a sitting area outside that that doesn't have a patio. It also creates shade and is quite eye pleasing.
5) A wood or composite deck can create a great outdoor area and it doesn't necessarily have to be attached to your home.
Once you chose your method of backyard area, accent it with solar or electric lights, sun shades, furniture, plants and yard art to make it trully yours and to add character to your outdoor living space!