I'm kind of in the same boat as you are. But, I'm just doing the recording/producing side right now.
Acutally, one thing did work for me when I first started.
I recorded a couple of bands for free. I took my time, put a lot of care into the recordings, and made sure that they were treated well. In turn, one of the guys in the band also plays in a different band. he liked the recording and his treatment so much, he hired me to record his other band's full-lenght album.
Now, I only do this part-time, and your situation might be different than mine, but a gig is a gig.
In the end, you'll get what you put into it.
good luck, 8-)

Right now I'm just starting to get more steady business. What has worked for me was putting up flyers at local music stores and posting on internet sites. From there I started getting phone calls from people and treated every caller like they were a major label client. I stayed completely honest, and gave them straightfoward answers. Once I landed the gigs I always made sure that they were comfortable, and listened to every word they had to say and responded to them.

Treat people like you'd want to be treated and even if you don't like their music at least let them see that you respect what they are doing and are interested in the project. I don't even mention past projects I've worked on because I want them to feel like their project is the only one that matters right here and right now.

It's those creature comforts that have gotten bands passed my lack of gear and small home studio. They liked what they heard coming from the speakers and they feel like "somebodys" when they are in my place. I make sure they leave feeling good about their project and still have a few bucks in their pockets.

Right now my steady business is repeat clients that are spreading the word. I tell those bands that every time they refer a band to me that sets up time....I knock some money off of their next project. Not only am I gaining another potential repeat client....I'm keeping the other one coming back! That is the key in my book...repeat business and word of mouth.

How many times have you been so excited about something your own band recorded that you showed everyone and their mom? Word spreads when you are good but even faster when you knock their socks off. So kick ass and take names!

I am in a band so i know what u would need to do to get me or anyother musician into your studio....FREE RECORDING TIME, if you give them that and the quality is amazing and they are treated nicly word will spread fast on your studio and it will be good but if the quality isnt good you wont get as much.

I've done a lot of work for free. I do FOH work for a couple of small acoustic music series. I offer to record the bands for free and I do a REAL quick mix of the concert so they can evaluate the performance and decide if they want to do more with it.

Then I start tracking my time and charge for the work. I've done a couple of nice live CDs and there's more to come.

I would agree with therecordingart on doing the flyers and some internet advertising. I would also make some business cards that you are able to give to prospective clients to let them know that you are serious and in the field looking for clients. This not only helps, but it projects a more professional image to that potential client. I also agree with giving out free studio time. Many artists that are up and coming just don't have the money to afford studio time but are pretty good overall. Giving out some free studio time just might convince them to come and work with you.