Find a room in your house that is secluded and free from street noise and foot traffic, or a building that doesn't have noisy businesses or neighbors who mind loud music.
Decide if you want to record via computer or invest in a digital or analog multi-track recorder. If you already own a Mac or PC, that may be the least expensive route -- though digital multi-track recorders are becoming more affordable.
Soundproof the studio by covering the inside studio walls and doors with plywood; use studio foam or sound blankets on the walls to absorb sound waves.
Set up a table and chair in an area as far away from where the musicians will be performing as possible, preferably in a separate room.
Set up the computer or multi-track recorder, effects, amplifier and monitors on the table. Use a power strip with built-in surge protection to protect the equipment during lightning storms.
Connect effects, compressors and limiters to aux ins and outs on the mixing console or interface if using ProTools; connect speakers to the amplifier, then to speaker out connections on the mixing console. The multi-track recorder should connect to "bus" sends on the mixing console.
Set up microphones in the studio and have musicians check each mic. Set sound level meters on the mixing console to just below the red, or "clipping" point.
Set effects such as delay and reverb to obtain the desired effect for each vocal or instrument. Set compression to give an "in your face" feel to vocals and other instruments. Remember to use restraint with effects and compression and don't overdo it.
Listen to some of your favorite CDs to see how the sound is mixed and aim for similar sounding results.
Go to local music stores and put up ads. Put ads on music-related Web sites and go to places where bands play.
Check out the types of music people are listening to if you are a DJ by reading Billboard, CMJ and other music journals.
Before marketing and selling a compilation CD, check out the latest music laws and talk to an entertainment attorney.