Estimating time/costs is the hard part of setting up - the technical side is a doddle compared to that.
You are on the right track of researching the opposition, especially if you are aiming at local business but don't forget that what you bring to a client has to be easily differentiated from what they do. Think about accessibility, standards compliance and overall customer service. There are an awful lot of DW jockeys out there who can knock out an eye-watering site in Flash, all the other bells and whistles but their work is not viewable without javascript enabled/IE/huge monitor resolution or any other combination you can think of.
As Taz said, costs depend on what you have to be able to do to get the site working - and don't forget the time that has to be spent in cleaning content sent to you when it has originated in Word/Powerpoint etc.
Essentially though the price is what the customer is prepared to pay.
