Nancy Rosanoff was flat broke when she went solo 18 years ago. She didn't get her personal finances in shape, put together a monthly business budget or secure a line of credit. "I knew what I had to live on, and I lived on that," says Rosanoff, a Pleasantville, New York, consultant who teaches people to use their intuition in making personal and professional decisions. "[It was] the miracle of the monthly rent." Rosanoff must have done something right. She was financially viable from the start, and today her corporate clients include such big names as McGraw-Hill Broadcasting. But she is the first to admit that her early success wasn't due to savvy financial management. It was years into the venture before she developed a system to keep her finances in shape. At some point, every free agent -- even those with the rosiest-colored glasses -- must do the same. Here's how:

1. Give Yourself a Reality Check
"Perhaps the most important step is to take a hard look and say, 'Is there really a business operation here?'" says Terri Lonier, CEO of Working Solo, Inc., a strategy consulting firm that advises Fortune 500 and high tech firms targeting the small office/home office market. "What will it take to turn it into a business, and more importantly, what will it take to get people to open their wallets?" Once you've identified a viable business model, crunch the numbers. Don't assume that you'll be able to charge high rates for your goods or services; check it out. Speak to colleagues and potential customers. And remember that revenues will be offset by business expenses.

2. Get Personal
Anticipate how many months it may take you to generate an income. Multiply that number by your monthly living expenses. That's the amount of money you need to stash away before going solo. Reexamine your living standard and put together a pared-down budget. Maybe you don't need that leased Acura. And that summer rental on the shore? You'll probably have to forgo that for a year or two. "Spend less money than you make," advises Gene Fairbrother, lead small business consultant for the National Association for the Self Employed. "Look for ways to be cheap." In the early days of her business, Rosanoff lived with her husband, two young daughters and dog in a one-bedroom apartment on Manhattan's Upper East Side. They bought their groceries with a credit card and got free theater tickets from friends.

3. Get a Credit Check
It's important to check your personal credit history. If you need a business loan or a line of credit, the bank will use your personal credit to determine if you qualify. There are three major credit reporting agencies: TRW, Equifax and Trans Union Corp. It's wise to get a copy of your report from all three, since they sometimes have different information. You can get a free report each year from TRW, but it will cost you $8 for each report from Equifax and Trans Union. You can also get your reports online at Experian and iCreditReport.com.

4. Get Down to Business
Free agents generally have lower start up costs than entrepreneurs who build a bona fide business from the outset. Virtually every one of them, however, will need a computer, a desk and various supplies. It's important to write it all into a budget. "It's almost as simplistic as sitting down and saying, 'I'm going to need a desk, a computer, tools and equipment, business cards, letterhead, etc.,'" says Fairbrother. Talk with people in your industry; ask them what equipment and supplies they use. Then price them out. Check industry organizations and unions for licensing requirements, which could raise your start up costs. And don't forget about all the benefits you received from your last employer, like health, life and disability insurance. Those perks are not cheap -- make sure you can afford them. Finally, set up a separate checking account for your venture and keep your personal and professional funds separate. Set aside one credit card for business use. The practice will help you keep good records for the IRS.

5. Don't Snub Uncle Sam
It happens to the best independent contractors. A client sends you a $2,000 check, and you begin imagining all the wonderful purchases you're going to make with the money. There's just one small catch: You'll keep just 40 to 50 percent of that -- if you're lucky. Self-employed individuals have the unhappy privilege of paying both the employer and employee portions of social security and Medicare. When you work for someone else, you pay just 7.65 percent. When you work for yourself, you pay a whopping 15.3 percent. When you add on state and local taxes, you'll pay 40 to 50 percent of your income to Uncle Sam on a quarterly basis. Make sure you figure your budget and profit projections accordingly.

6. Keep Good Records
Before you throw your hands up in desperation, here's one word that can save your dream: deductions. As a sole proprietor, you can deduct virtually everything related to the business. That includes your telephone, computer, office furniture, travel expenses, professional education -- even your home office. Just remember deductions are a red flag to the IRS, meaning that you could be inviting an audit. So keep good records: every phone bill and every receipt from the office supply store. If you don't have record of an expense, don't deduct it. Both Fairbrother and Lonier recommend hiring a good tax professional. "The money you spend on a tax preparer is often the best money you can spend," says Lonier. "They can save you more money than they cost you because they know about the tax laws. You go to them with very good records, and they make the tax law work for you."

7. Collect
You've completed the work; now it's time to collect. Sounds easy, right? Wrong. Many independent contractors get so caught up in work that they forget receivables are only as good as the systems behind them. Lonier has seen free agents come up with some pretty basic, but practical systems. Some type up an invoice before starting a job, then tack it above their desks as a reminder. Others stuff outstanding invoices in a file folder and sift through it one morning each week. The trick is to develop a system that works for you. "When I sent out an invoice I code it a certain way," says Rosanoff. She uses Quicken to track outstanding and paid invoices, and is not averse to placing a friendly phone call to remind delinquent clients. "What I do is so relationship-oriented that I rarely have a problem getting paid."

8. Invest in Software
It's no secret that technology has changed the face of business. With PCs, fax machines and Web sites, small businesses often find themselves on equal footing with the big guys. Bookkeeping programs such as Quicken, Quickbooks, Peachtree and MYOB have been a big part of that change. These software programs can help you set a budget, run monthly balance sheets, reconcile your checkbook, track invoices and record expenses. Those tools can help you streamline the financial management end of your business and free you up for the work you love.

9. Don't Quit Your Day Job
You've got a brilliant idea for a business venture, or so you think. Maybe it is brilliant. But before you turn in your resignation, test the waters. "The best time to go out on your own is while you've got a regular paycheck coming in," says Fairbrother. He recommends moonlighting on the side for several months. Build up a client base and make sure free agency is for you. If you plan to go into an unfamiliar industry, get a part-time job.