Who Your Competition Is, And Why You're Better.
I'm going to start out by telling you that your main competition will not be other web development businesses in your home town. If you live within 100 miles of a major city, you'll likely be competing for jobs with companies reaching in your direction for business. Working in Franklin County, Missouri, 50 miles to the west of St. Louis, I've often found that many of my customers have sought out bids from bigger companies in the city. You'll also be competing with national companies that specialize in certain industries. Recently, I bid on a job for a local dentist who had been considering going with a company based in Minneapolis that made websites specifically for health professionals.
In order to sell your services effectively, you have to figure out what advantages you have over these other, larger companies. In my case, my biggest advantage is: I'm closer to my clients, able to meet with them face to face, and they can hold me accountable for the problems that arise. A nice selling point for me is that I can tell my customers that I'll be the one to answer the phone when there's a problem. If they have a problem with a larger company, that company may not be agile enough to respond. The customer might spend a lot of time on the phone with a call center or receptionist unfamiliar with their needs. If you make these promises, however, you have to be able to live up to them.
As for local competition, if possible, try to make friends with them. You probably have more in common than you think, you're facing the same challenges from outside competition, after all. You never know what the future may bring - someday you may need to call them for a job, or you may wind up finding out you can do more by partnering with them than by competing. Remember, however, that you are still in competition with them, but don't try to compete with them on price or resort to dirty tactics like badmouthing their work. Instead, take the difficult path and try to find a service that they don't offer or aren't selling effectively, and then sell that in addition to your current services.
Admittedly, getting that first person to trust you will be one of the hardest things you'll have to do - it's their business, after all, and you may have never tackled a project like that before. So you might have to knock on doors, but be persistent, because eventually someone will say yes.
In my case, landing jobs was especially difficult at first because I didn't have a wide portfolio of commercial work. In order to succeed, I had to keep a positive attitude and be perpared to seize opportunities. I was fortunate that my Capstone course in Graphic Design at East Central College ended with a portfolio review with members of the local business community, including Ben Ziglin of Ziglin Signs. I made a good impression, and that lead to some consulting work, which lead to my first major paying website gig. I also volunteered my services at my local church, Zion United Church of Christ, and built them a small site. In doing this I was able to help a group I liked while also adding another site to my portfolio.
Doing these jobs has lead to positive word of mouth. Ziglin's company is pretty established in the region, and I've already run into a situation where someone else was willing to trust me because he already had. This experience has taught me that while landing work is essential, doing good work and making sure your customers are happy is much more important, because what they say about you will determine whether you get clients in the future.
Attend Industry Events (if possible)
Because St. Louis is just 50 miles away, it's still economical enough for me to drive in to AIGA events and other social gatherings where I can meet and mingle with other talented people. During one events, I got lucky enough to meet some recruiters for Creatives On Call, a company which helps find work for creatives. I wound up having an interview with them, and that lead to me subcontracting some web production work for a fast growing company, All Volleyball. In addition, during my time at All Volleyball, I was able to learn a little bit from their organization about e-mail marketing, social media, and search engine optimization, which admittedly are areas where I needed more experience. I think I've learned a lot there, and all that I've learned will be able to help my clients in the future.
I'm not going to lie, I was very nervous when I attended my first event. I think all designers are a little afraid of running into people more dynamic than they are - however I've found that one of the best ways to learn and improve is by hanging out with those people, sharing ideas and discussing the processes and difficulties we run into in our work. If nothing else, at least try going once with an open mind, and force yourself to say hello to everyone you meet.
The key to success for me has been doing good work when I can land it, and learning as much as possible from the new experiences I have to go through. It definitely hasn't been easy, but I've weathered the initial storms and it looks the second half of the year will be twice as busy as the first.