There are three things you need to have going on in the first place in order to have a chance at making a living as a musician. You need to be a great songwriter, a great performer, and a great businessperson. I'll touch on all of those things in here, but I'll mainly focus on the most mysterious part of that, the business angle.
The Music Industry That Was
The conventional music industry may, for a brief time, have worked well for quite a few musicians and bands and such, but it's almost completely moribund at this point. The first thing you need to do is give up on it.
The first key to success as a DIY musician is giving away your music online. This is how you get an audience. This is how you find people who want to come to your shows -- and organize them! And fund your future CD projects, etc.
How To Give It Away
You want to use different platforms for giving away your music -- and you can also sell it online as well, and of course in physical form, like CDs, too. You want to give lots of music away for anonymous download on sites like Soundcloud and Soundclick, but also give it away through setups that require people to give you their email in order to download stuff. Using sites like Bandcamp to sell music is also good. Through sites like CD Baby you can easily get all kinds of digital distribution, both free and paid, and it's all good for you as a DIY musician who does not get commercial airplay and probably never will. This is your airplay -- embrace it!
Using Your Email List
You need to have a good email list, which you can set up with an account with a service like Listbaby or others. You need to have it divided geographically, and target people geographically and through other means so that you are really communicating with people about stuff that's relevant to them.
Crowdsourcing Your Gigs
There's no other way to do it. It would be nice if you could get a big crowd from your email list or from venues promoting events happening in them, but it doesn't work like that. You need volunteers in each town to head up organizing a gig for you, otherwise you can pretty much guarantee it won't work. Network effectively with your fans, and you can make it work.
How To Organize A Gig
Once you have people in different towns lined up to organize gigs for you, you need to be able to explain to them how to do it. Here's what I have on my website to help people with this. And below are more thoughts on the subject.
How To Tour
Once you're ready to do a tour, you have to remember that even if you manage to make a living as a DIY musician, it's going to be a marginal existence at best, and you need to be good at cutting corners without losing your mind in the process.
There are a lot of countries in the world where most people speak fluent English. The main trick is getting in to them, either legally or not.
You have to have a good website that's mobile-friendly. You need to have a presence on Facebook and Twitter and post interesting new content regularly, and listing your upcoming gigs on Songkick definitely won't hurt, either.
Crowdsourcing CDs and More
The thing that your fans are most willing to shell out their hard-earned money for are recording projects. You can use Kickstarter and other services to do this. Giving people the option of subscribing to you is another good crowdsourcing idea.
(Not) Touring With A Band
If you want to pay the rent as a performing musician, you can pretty much forget about forming a band. You need to be self-sufficient, as a performer, and as a sole proprietorship.
Songwriting and Performing
Fairly obviously, all of the business advice in the world is useless if you're not a spellbindingly good performer. You gotta do more than strum that instrument. You gotta memorize your lyrics. You gotta know how to tell a story to introduce a song, not explain what the song is about before you sing it. You gotta be able to tell a story in your songs, and not try to tell more than one story at a time. And the rhymes all have to be perfect.
Following the entire recipe herein is certainly no guarantee of success, but I'm convinced that if you do diligently follow the recipe, you at least have a fighting chance! Good luck! There's lots of room in the world for more of us...