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Things to consider

Before you get started you should check that your plants will get enough sunlight out on your balcony. It’s common to overestimate how much full sun a space actually receives, and for how many hours.
Things like nearby buildings, solid walls and railings, and the direction the balcony faces can all greatly impact the amount of light able to reach your plants.

Consider which direction your balcony is facing - a north-facing balcony will typically be in shade for much of the daytime, which can be good for more sensitive plants that may get damaged by harsh midday sun. Likewise, note that balconies - especially glass ones - can get very hot during the day.
If your balcony has some sort of roof then this can help to provide some shade and shelter from wind and the weather , but if it isn’t covered, the amount of rainfall it gets will affect how often you need to water.
Even for plants that aren’t fussed about the wind, bear in mind that increased airflow will cause the soil to dry out much quicker than in plant pots that aren’t exposed to wind, so you may need to water more often than usual. You may also need to provide frost protection in the winter, e.g. by wrapping your plant pots in burlap.

Pots that are too small can prevent water from draining from the soil efficiently (which increases the likelihood of root rot developing) and can also restrict the space that the roots of your plant have available to expand into, which inhibits sufficient growth of the plant as a whole.
Plants without enough available root space can become root-bound - this is particularly relevant for fast-growing plants such as flowering annuals. Larger pots also offer better stability when exposed to the elements , so are a must for hardy perennial plants as well as shrubs and trees to ensure they don't get knocked over by the wind, for example!
You should always ensure that your plant pots have drainage holes at the bottom. Without these, balcony plants can quickly become waterlogged after periods of rain, or even after just normal watering if you're not careful.