Sketch the design of your band shirt before you do anything else. You don't have to figure out every facet of the shirt's art. After all, a lot of the fun can be had by experimenting on the fly. Think about the color schemes you should use. Does a pink T-shirt with silver drawing fit the attitude of the band? A black bowling shirt with fabric patches makes a different kind of statement.
Measure all of the pieces of fabric you'll need to cut and sew. If you're altering a shirt, figure out whether you'll need to take out any of the seams. Instead of cutting the fabric blindly, start out with paper and cut the pieces until they make a pattern you can transfer to the fabric with chalk.
Sew the shirt together with a sewing machine, or do it by hand if you're into the classic way of doing things. Make sure all of the seams are strong. Try the shirt on to make sure it looks the way you thought it would.
Decorate your shirt. Let your imagination run wild for this part. If you want your shirt to glitter and gleam in the light, sew on some sequins. Push some safety pins into the shirt to get a punk rock look. Distressing the fabric also adds character. Make the shirt look worn by rubbing it with sandpaper in spots or slicing small holes with a sharp razor blade. You can always write the name of the band on the shirt, but you could also just use the band's logo instead.
Wash the shirt before you wear it or give it away to make sure that the paint or other colors won't bleed. Additionally, shirts sometimes shrink on the first wash, so it's a good idea to get that out of the way before the first use.