Word of mouth is a great way to find free recommendations; they just aren’t always accurate. Ask your friends, neighbors, coworkers, and any other acquaintances to share their experiences and any recommendations they might have. If no one seems to have anything to share, ask for any negative reviews so you will at least know who to avoid. Sometimes people just don’t want to share their personal failures, so they may say the contractors are better than they really are. You know the people you are talking to, so judge their feedback against what you know about their honesty, judgement, perspective, biases, connections, and affiliations.

The really good thing about the internet is that is basically free, and you can easily find local companies. Just make sure to check that they are legal and appropriately licensed.

Your local Chamber of Commerce is a great way to find Contractors, because they will often join in order to help promote their business and stay connected with their community.

Don’t discount the local publications such as printed circulars for finding local contractors. You can often find these publications at grocery stores, restaurants, and coffee houses. Contractors advertising in these usually live, work, and serve the local community.

There are various websites that offer contractor listings or recommendations. The competition for this market is growing with more and more of these sites popping up all of the time. Typically, someone either pays for the listing or for the referral.
Some referral websites charge you but the contractors join free, others charge contractors and you join for free. Some referral websites charge contractors up front for each lead, even if a job does not become a bid. Some websites charge a flat fee per year regardless of how few or many leads they get. The owner joins for free and there tends to be more contractor turnover, so the reviews can get stale quickly.
These are just referral services. They'll give you multiple recommendations and help you quickly build your bidders list, but they won't help you create the scope of work, negotiate price, or select the best bidder; and they can't help you if you are having a problem.