In my experience as a full time self-employed web designer, I got started by offereing a great product at a reasonable price. I did focus on who I wanted to work with based on my design skills. Then I went in search for those clients by advertising, handing out business cards, networking and so on. Nothing expensive at all. All it took in the beginning was a few good clients and then word of mouth has been it for me in a nutshell. I have not advertised since 2001 and am constantly busy. Too busy.
I have since raised my prices to reflect my skills, but still within the budget of MY clientele. I do kick back a % for referrals.

Hope that helps!