I will start by saying that your contract will be the most important thing on any project. It needs to be thought about and tweaked until you are comfortable with it.
I just had a project go to shambles and the only way I was protected was with the contract that I had in place.
The payments also should be laid out in the contract. For example, I usually have four payments. An initial non-refundable deposit, and then another payment on each deliverable (design, development, completion).
The best way to get work is the tricky part. It will most certainly be slow to begin with, but word of mouth pretty much gets the job done for me now. Every once and a while somebody on Craiglist is willing to pay a suitable amount of money.
Getting in touch with local businesses is great. Going to Chamber of Commerce meetings, etc.