Select a location in your home free from outside noise and spacious enough to accommodate musicians. Choose a room that is acoustically neutral, with few hard surfaces, ample drapes, and thick carpeting to absorb reflected sound.
Place the appropriate microphones close to the sound source. The farther the microphone is from the instrument or vocalist, the more room noise is heard. Choose microphones appropriate for each application. Some microphones are designed specifically for vocals while others work best with certain types of instruments.
Choose a mixer with enough audio outputs to match the individual inputs available on your multi-track recording device. The ability to record instruments on separate tracks will allow you to mix the instruments independent of each another after they are recorded. This is preferable to a "live mix" that cannot be modified once the recording has been completed.
Locate the audio mixer in a separate room so the sound heard from the recording room is minimal. Separating the recording and mixing rooms allows you to hear the audio as it will be recorded, not as it is being performed.
Connect the audio sources from the recording room to the mixer using the microphone cables.
Connect the audio inputs from your recording device to the audio outputs from your mixer. A recording device could be a Computer Digital Audio Workstation (DAW) or digital multi-track recorder.
Connect headphones to the headphone output of the mixer so you can hear the audio as it is being recorded.
Ask the musicians to rehearse. While they are performing, adjust the individual levels on the mixer so they are neither too loud nor too soft. If needed, use the mixer's EQ controls to reduce noise by turning down the higher frequencies. Monitor each individual input, making volume or EQ adjustments as needed.
Record the performances to your multi-track recording device. When finished, complete the final mix-down by combining the individual tracks into a two-channel stereo output. Adjust the instrument and vocal sources as needed to achieve the desired balance. Add effects like reverb or digital delay to simulate the acoustics of a larger room or produce other special effects.
Master the individual tracks for the final stereo mix using a Digital Audio Workstation or CD audio recorder.