Unless you're going to get, or already have a business license and tax id- I'd heavily recommend you work for cash! I've been doing what your thinking about for several years now- pretty much under the radar. I don't advertise other than by word of mouth, and my work speaks for itself(maybe a little help from the owners). I typically have 2-4 projects lined up, anything from a few minor repairs/additions, to the 'here's a shell and everything I've got in boxes. Let me know when it's done' kinda thing. For the most part I get a lump sum up front to buy parts and cover some labor. Then as things progress, I keep a tally of the hours spent and parts receipts, and the owner will give me more $ as needed. I've got several repeat customers, so must be doing something right. I absolutely love doing it- it's like getting paid to learn and build cool cars. It's how I can afford to play in this car hobby we all love! Good luck- hopefully you can do the same!
Working on old cars teaches us patience... and every curse word imaginable!