Word of mouth is a good thing in my opinion, for a small hobby/business. It grows slow enough that the changes are easier to cope with.
Unfortunately, it can take a long time to secure business. Going from 'word of mouth' to advertising is just like starting from nothing, except you may have trickles of work to help with cash flow. The only problem with WOM that may not be considered is if you have to start deciding between your day work and your business it can be a very high fence to climb - the work is abundant enough to be attractive but not enough to support you and your family and the overhead of the shop. Cash flow can be a hidden monster when making the transisition between "WOM" and full-scale business. It's a good situation to be in, for sure but it can challenge the most ambitious entrepenuer.
Plan for success and prepare for failure. Always think 'Success'. Good luck. ..and find a trustworthy accountant that you trust - do that early.
Scott
Consistency is a good thing....unless you're consistently an idiot.