Research how labels work by reading "All You Need to Know About the Music Business" by Donald S. Passman or "What They'll Never Tell You About the Music Business" by Peter Thall. Knowing the ins and outs of the music business will---at least---show your potential label that you've done some research, and---at best---give you more bargaining power. Think of it as knowing the basics of how a car works before you take it to a mechanic.
Discuss with your band and manager the terms you want the most. In negotiations, both parties will have to compromise, so try to come to an agreement about what's most important to you. For instance, some bands and artists will prefer a larger advancement over a higher royalty payment, while others may find that owning the rights to their masters is their top priority.
Ask the label how it intends to promote your album. Many labels don't know how a hit record is made any more than you do. A common habit of labels is to put as much promotion into their new band as possible, without really narrowing down a target audience and finding the most effective method of advertisement for a particular band. For instance, shooting a music video can cost upwards of $100,000, and if your target audience isn't watching music videos, you'll be responsible for repaying that money out of your royalties for what was essentially an ineffective means of promotion.
Try to get a "recapture clause" in your contract, which allows the artist to regain ownership of the masters once the contract has been terminated. Owning the rights during the length of the contract rarely occurs, but even if you don't sell a lot of records during your contractual relationship with the label, that doesn't mean you won't sell records later on in your career. If the label retains ownership of the masters from that unsuccessful album, they may recoup lots of money in royalties after you've hit it big.
Get a lawyer to look at a copy of your contract. Most labels will fax you a copy, or let you look over it for awhile before signing it. If you're at the point in your career when you're signing contracts, you should have a lawyer, but in case you don't, contact one in your hometown. There should be a lawyer who can go over it with you relatively quickly at a reasonable rate. Avoid using any lawyers recommended by the label, as it's always in the best interest of both parties to have different lawyers, no matter the negotiation.