Identify your maximum and minimum budget for your event. This will be the primary driver when it comes to decision making. Find bands that will perform in this budget range. Looking online at entertainment or booking agencies can help.
Research the market and get several bids from bands that you would like to employ. Different bands perform at different levels and usually charge accordingly, which means better bands charge more. By getting several bids for jobs, you will get a good idea of what the market is paying.
Narrow down your band choices with an eye based on preference more than your pocket book at this point. Choose at least two. Find out if the bands are available for the date(s) you need them for.
Make an offer. Don't worry that you are being difficult or insulting: Fair offers are fair game. After understanding the market and finding a date, and getting a bid, a counteroffer is almost expected. There are no written guidelines to counter offers, however a 20 to 25 percent discount is good place to start.
Schedule your event on a weekday if possible. A weekday allows a band to book their weekend for the desired amounts and come down in price considerably on weekday events.
Offer food and drink as a part of compensation. Sometimes this can help bring prices down as well.
Decide what is most important. If you are on the fence about price, you have to make a decision concerning the value of good entertainment and bargain basement entertainment.