Ok. So me and a friend always like to sit around, pick guitars and sing together, and have always dreamed of starting in the music industry. We've written 3 complete songs and are working on more. Our genre is inspired by Hank Williams III, country and hellbilly rock/metal. We want to start a sort of duo, like Big & Rich and Florida-Georgia Line. We had the idea of recording a demo album, putting up a website and giving the demo album away free on the website. Also, I am pretty good at video editing so we figured we'd give making a few YouTube music videos a shot. But, there are a few road blocks...first off, how to record the music? We (mainly) play acoustic guitars that cannot plug into amps. We do not have any microphones. I have a Canon HD Camcorder, an HP Laptop, and an iPhone 4s. I also have professional audio/video editing software. Second, getting the word out and getting gigs. We live in a small town, so how would we go about booking gigs? We are completely new to the music industry but we are willing to do whatever it takes to get started. One more slight problem though...we don't have hardly any money. Seriously. We're broke. But this has been a dream of ours for a long time and we have to at least give it a shot.

Please help? Any advice would be GREATLY appreciated.
On recording guitars:

I think a lot of people who record acoustic guitars place the mic near the soundboard of the guitar. I've seen clapton do it live. You could(read: should) get a mic for not much and upgrade later if you have the cash. Brands that come to mind are Samson(Chinese Shure) and Audio Technica.

On gigs:

Call every venue you think that has or would like to have live music. Acoustic duos are usually well received by anyone. Pubs, bars, clubs all probably want live music. Play anywhere you can. You probably won't make much if any money. Just don't pay to play. Talent shows would be a great place to start.

Money issues:

I am saving every penny to get my band into a recording studio to record a demo to give to record companies. You don't need to have a recording studio, you could just record yourselves on Reaper or Ableton since you only want to play in small areas while you're just starting out. We're a 7 piece so recording cost per person is around $15 a song.

Hope this helps.
A few choices here...

1. Get day jobs, save up for a couple decent mics, some form of audio interface and do your own basic recordings that you can put together with your videos and hope for you tube fame.

2. Get day jobs, save up for a decent recording at a studio and then do the same as above....this will give you a decent recording which can be sold at gigs

3. Get day jobs, save up for microphones, cables, mixer, stands and what have you, put together a great set including your own music and some covers and then work the scene.....be willing to play for free or at least a meal until your name starts getting around and then hopefully you'll start getting some form of cash flow and then start thinking about recording.

The good part with #3 is you'll see if you have what it takes and people want what your selling....of course putting out some rough you tube videos just using the cam- Mic are good...just be critical and don't blame "poor audio" for your mistakes.....good music is always good music!

And take note too the "job" part....dreams are a good thing too have but until your ferry godmother shows up there is no such thing as a free ride ;-)
I believe in god, jesus and the holy ghost.....or as i call them Angus, Kirk and Lemmy