Methods I've found successful to keep business flowing:
1. YOU NEED A CHARITY PORTFOLIO
Build a client list of at least 5 charity sites, for starters. Or offer deals to where your "Charity" client can't pass it up. These are your golden eggs, treat them well, design them well! Do not half-ass these puppies at all-- keep them looking sharp. Even if you have to donate your time and a little $ for a couple charity sites, do it-- they look like platinum on your portfolio, and get your name/business name out there. Just make sure you properly credit yourself in clearly visible areas on the sites (no, not dinky shady links in small font at the bottom of the page).
2. BUSINESS CARDS DO WORK...
Out in the real world
Keep your eyes peeled for people who love to talk about their business ventures and such at coffee shops, and the like. I've gotten a lot of work just from listening... and then chiming in as a perfect stranger. You are just what they ordered, but know always how to present yourself and your services. Always be cautious to present "what's in it for them". A business card without a face is mostly worthless. Without person-to-person communication skills, you might as well stay at home. If that's the case, don't worry, it's not the end of the world...
List of favorites: PROSPECTS
A huge demand for work can be found simply by scouting the net for various sites that are in your interest for designing. For example: I'm into surfing as a hobby, and I think it'd be cool to design for some pro surfer chick (woohoo). So I hop on to Google and search for pro surfer chicks, and I scout out the various site results. When you come across site's that cause you to scowl, "oh my God that site is horrible!" That means you have a prospect. Add it to your Favorites: PROSPECTS. I don't believe you should ever design sites for something you're not interested in, because then you lose interest quickly. Have fun with them.
Gather a list of prospects using this method, and then analyze which ones would be most profitable to hit up first. Prioritize them, then send them a professional inquiry with a special "website re-design" deal.
It also helps to have your own (SCRIPT) templates (NOT CHEESY WYSIWYG TEMPLATES!) made to where you can punch out a high-quality looking site in a short amount of time, focusing on graphic presentation of the content. Re-designing sites is the best because you already have the majority of your content, it's faster to finish, so you can afford to charge less oftentimes, and do more sites.
I haven't once paid (directly) for advertising. I've been in the business for 4yrs. You only should end up paying (relatively cheap expenses) for your portfolio building days, charity sites, etc.