So you are really targeting local businesses in your area. Now how do you reach them? The best way that pops in my head right now is through offline marketing - local newpaper, magazine, fylers, phone inquiries, etc.
Linda made great suggestions as to building up a portfolio so as to enhance your credibility as a designer. If you don't have a portfolio yet, the next best thing to do is to develop some templates or sample sites. I can relate to your dilema as I have been in that same road when I was just starting out in the industry.
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