Re: Newspaper Ad?
Newspaper ads might be effective, but I often find that they are a shotgun approach to advertising. You are depending on 1) Someone who needs your service having a subscription to the paper, 2) That they take the time to look at your ad and 3) that they look at your ad _when_ they need your service. For something as esoteric as photo retouching (folks don't need it every day like shopping for a car, or going to the movies). I would use a more personal means of advertising.
First off, join the local Chamber of Commerce and NETWORK! Go to their luncheons, mixers etc. Get some magnetic business cards and leave those at the Chamber (most Chambers will let you leave brochures or cards if you are a member, and you have the Chamber staff working for you if anyone should call or stop in and inquire about your services.
Also, leave those magnetic cards at places that people use photo services. Network with your local camera shop, with local photographers, frame shops, funeral homes (I've done several jobs for pictoral displays at funerals. They are always RUSH, but pay well) etc. Most small business owners will work with you and can hand your cards out to people who may ask about your services. With a magnetic business card, they will take it home and put in on the refrigerator and _then_ when they want your services you are right there in front of their nose.
Get some inexpensive ball point pens and leave 20 or so with the same shop owners. They are always in need of pens, and again, if they have your name and contact information on them, they will remember you.
All of this might cost you $400-$500, but it's all about NETWORKING and using advertising that remains to be seen. Print out a couple before/after samples on high quality paper on your ink jet to show folks what you can do and as leave behinds for shop owners. This just cost pennies.
All of this assumes you are willing to get off your duff and go out and sell yourself and your services. After a time, people will be referred to you by word of mouth.