Start rhyming. Use simple cadences and basic rhyme patterns. The important thing is to get comfortable developing raps off the top of your head. Select things in your immediate environment as the topic of your raps. Practice in different environments to give yourself a diverse range of things to rap about.
Be OK with feeling foolish. A big part of being a great freestyle rapper is overcoming your own self-doubts.
Develop your vocabulary by flipping through your thesaurus and dictionary, as well as listening to hip-hop music and staying knowledgeable about the latest developments in slang.
Keep abreast of current developments in pop culture and in the news. Freshness is key to being a great freestyle rapper and dissing your opponent by comparing him to the latest ousted dictator is sure to grab attention.
Watch other freestyle rappers by going to competitions in your area or checking out winning rappers on video-sharing websites.
Time yourself. Try to rap consistently without any breaks for a full minute. Once you've got that down increase your time to two minutes. Most rounds of rap battles are limited to less than two minutes, but forcing yourself to go longer will build your stamina and improve focus.
Start a cipher -- a group of people coming together to freestyle rap -- among your friends. Get comfortable with freestyle rapping in front of other people. Remember a big part of freestyle rapping is dissing your competition and you'll find it much easier to insult your friends than strangers, at least at first.
Take your show on the road, starting ciphers in areas that are less comfortable. Get out of the house and rap out in the street. Once that feels comfortable, rap outside of your neighborhood. Keep pushing the envelop.
Find a nearby freestyle competition. These can be held at hip-hop clubs or spoken-word venues. It may be necessary to organize your own freestyle competition, depending on where you live.
Don't get discouraged. It's unlikely you'll win your first organized competition. The important thing is to get out in front of an audience and then do it again and again.
Once you start to make a name for yourself locally, you'll need to branch out to other areas, constantly stepping out of your comfort zone.
Target national and international competitions once you've gotten citywide wins under your belt.