I want to test a website with at least five people locally but I'm not sure how to go about how to find people willing to through with it.
Do others offer an incentive to users and if so what has worked best?
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You're asking about two things: recruiting and incentives.
How you recruit depends on a lot of things. I once worked at a university that had a website where researchers posted studies and people signed up for them. Piece of cake. If you have a list of local customers you can send a set of people an email asking if they're interested. You could recruit from the families and friends of your coworkers. You can do guerrilla testing and just set up your test on the street or at a coffeeshop and pull in passersby.
If you're testing in person, you can give cash or gift cards as incentives. If it's a remote test you can send electronic gift cards. Amazon has a handy option to send multiple e-giftcards at once so you don't have to fill out the purchase form for each participant.
Then there are web-based testing services (called unmoderated testing) like UserTesting.com, UserZoom, and OptimalWorkshop.com. Some of those handle the recruiting and incentives for you. The disadvantage is that you're not in the room with the testers.
Doing user testing properly is potentially quite an expensive business as you want representative users of your website, and you want to try to balance user demographics.
If the target market has a wide user demographic then testing it on 5 people isn't really enough ( it will find some of the problems but it won't find the majority of them ).
( The 'magic number 5' comes from Jacob Neilsen's recommendation from years ago - and what he was recommending was repeated rounds of testing using a sample size of 5 )
So it depends rather whether its targetted at a particular group of people or just 'the general public'.
If you want users to turn up to testing sessions then providing an incentive will get them to turn up.
However the size of the incentive is a bit of a black art as you need to think about:
How well off / difficult to get hold of your target users are: if you want poor students they will need a lower level of incentive than busy Doctors.
How long the session length is and how far people have to travel to your testing session (and what time / day of the week you are holding it on)
Whether you have the time to reschedule more testing if you get 'no shows'. The more money you offer the more likely everybody is to turn up.