385 sq ft is small, but you can do it! I'm what now seems like an expansive 960 sq ft home and I would definitely suggest using as much vertical space as possible. Tables that fold up against the wall are key! There are so many great storage solutions for tiny kitchens and bathrooms these days you'll be sure to find the right fit for your needs.

You'll find tons of great advice and fun reads about people living in the same or smaller square footabe that you are here: http://www.houzz.com/ideabooks/Small-Spaces#Decorating

I hope you keep us up to date with photos and progress of your home!