Start by putting together a list of the local bands and artists that you like. You've taken this job because you love music, so put your taste to work for you. If you like these musicians, chances are that many of the local residents and concertgoers will also like them. But remember, you are trying attract fans of varying ages. You need to have a diverse menu of acts.
Make a list of rock bands, pop bands, hip-hop bands, family friendly musicians and rappers. Work out a lineup that you think will be appropriate with the family friendly bands first and the more adult groups going on later. This makes sense because young kids can hear their music early in the day and grownups can hear their music later without fear of embarrassment or inappropriate lyrics.
Find a great location that offers plenty of open spaces for outdoor festivals. Not only do you need to build a stage so the musicians can be seen from varying distances, but you also want to give the food and drink purveyors the opportunity to prepare their specialties and sell them to the fans. You can find a location by going to the local realtors and asking for recommendations and then securing permits for food, drink, construction and entertainment with the local municipality when required. Not all towns require such licensing, but it is a good idea to check before you start building.For an indoor location, you need to find a theater that is willing to rent you space and has the adequate size to put on a large show involving multiple musical acts. An indoor venue generally works best in the winter or if you are dealing with a large stadium that has the needed facilities. Bigger sports stadiums work out well, but they are also very expensive to rent and are generally not recommended unless you have well-established, big-name bands at your disposal.
Hire sound and engineering people to give the musicians all the help they need. The last thing you want is for a group to take to the stage and the lights go out or the speakers blow. You can't expect the musicians to handle these problems because they are playing at your venue. Your sound, electrical and engineering experts will allow your stars to keep the music playing.
You need to find appropriate security people. If you are planning your festival for families the last thing you want is for a beer-swilling crowd to start a huge brawl. Security people need to be present to make sure that nobody gets the idea that they want to start any kind of ruckus. The mere presence of some large-sized security people should be enough to keep your event safe.
Make sure you contact the top restaurants and food emporiums in your area. It's not all about the music. People have to eat and drink as well, so you might as well make sure they are not hungry or thirsty.