>I have a small database which is up to 50 MB now. This increases every day by about 1 MB and there is practically no data being added. This database shouldn't be more than 4 to 5 MB at most. I tried shrink database but this only diminished it by a few bytes. What can I do to try to minimize the size of the MDF?

First you have to figure out which table and why keeps increasing in size. You can start by running stored procedure from http://blogs.technet.com/mdegre/archive/2009/10/14/determining-sql-server-table-size.aspx to see the size of the tables in the DB.