Do your research. Know the label's area of specialty, and where you fit. Also, go to the label's website and make note of their demo submission policy, as well as who to contact with your demo.
Make sure to note the contact's name, title, mailing address as well as the label's requirements for submission and consideration.
Using your word processing software, create a letterhead for yourself or your band if you have not already done so. A letterhead tells the label that you are professional and committed.
Prepare a cover letter to the label contact. In one page or less, describe what you want (a record deal, for example), as well as your style, demo, and experience.
If your CD was self-made, print an attractive CD cover for your demo, using your favorite graphics program.
Prepare a media kit to go with your demo submission--this kit will also serve you for future submissions.
Create a one-sheet that summarizes the demo and its marketability, sound, track list, and audience.
Create and print a biography on you or your band, as well as any clippings of positive press you may have achieved for your albums or live performances.
Include a track list outlining the songs on your demo, as well as lyric sheets for your included songs.
Design and print a cover label for your demo kit using your word processor and any popular inkjet printer label in standard (10-to-a-sheet or 20-to-a-sheet) sizes.
Print out your media kit materials using any good inkjet or laser printer, with your quality settings on "fine."
Put the media kit materials into the folder, with at least a page or two on each side.
Sign the cover letter and put it in the front, left-side pocket, and put the CD demo in the front, right-hand pocket, in front of the kit materials.
Affix the label to the front cover of the kit, and enclose in a sturdy 10" by 14" envelope or cardboard mailer (even better), or any appropriately sized envelope that is able to safely accommodate your materials.
Your kit is now polished, professional, and ready to send off. Good luck!