Find a space. Two adjoining rooms will work best. One room will be your performance room. The second will contain your control board and recording equipment. If you don't have access to two rooms, use a single room, designating an area for your controls and the other for performing.
Find a room without windows, preferably in a cellar or secure building. Depending on your needs, you must have enough room for guitars, amplifiers, microphone stands, drums and other equipment. Make sure your room has at least one GFI outlet to avoid blowing fuses and electrical breakers.
Soundproof your performance area. Sound proofing a room is relatively simple. It can be done in a variety of ways. To stick with the basics, cover the walls with soundproof foam to eliminate echoes. Soundproof foam can be purchased at home centers, music stores or online. It is commonly sold in 8-foot rolls (see Resources below). Measure your walls to determine your foam needs. Cover windows and vents if possible. Use a stapler or small tacks to hang foam. If you are covering cement or concrete walls, use double-sided carpet tape. If your studio will be all in one room, soundproof the entire room, including your control area.
Outfit your performance room. You will need at least 3 to 5 guitar, microphone and music stands and a few stools. Stands and stools are cheap and sold at most music stores. You may also outfit your performance room with couches, lounge chairs and a small table and chairs, as long as you leave enough room for gear.
Outfit your control room. You will need a spacious desk, large enough to hold studio monitors, computer screens and laptops. You'll also need an ergonomic desk chair.
To house power amps, computer cases and mixers, buy enough studio racks (see Resources below). Position racks close to your desk. Allow for enough room to run microphone and other cables to the performance area. Your desk and racks should face the performance area so the person at the controls can see the musicians and communicate with them as they perform. A window between the two rooms is recommended.
Add sound equipment. You only need simple equipment to get started. To start recording music, set up a basic mixing board (minimum of 8 channels). You'll need a power amp to run your board if you plan to run several instruments through it at the same time. You'll also need a pair of basic studio monitors. There are many types of monitors; however, standard, entry-level speakers will work (see Resources below).
Install a computer and software. Modern studios are mostly powered by digital recording software. You will need a solid computer with a professional-grade sound card and enough memory to power programs. Any computer will work, as long as it has USB capability, at least 60 gigabytes of memory and at sufficient processor. There are several types of recording software on the market. Some is available as freeware. Others can be pricey. A basic copy of Cakewalk is an affordable and user-friendly program used by many professionals (see Resources below).
Wire your studio. Following the instructions on your equipment, connect your computer to your mixing board. Connect your power amp to your mixing board as-needed. Connect XLR microphone cables to your mixing board and run them to your performance area.
Add microphones. There are different microphones for different applications. For studio use, you will need at least two condenser microphones for vocals. Add more if you plan to record multiple vocal tracks simultaneously. Condensers are sold at most music stores and fall into the $80 to $500 range,depending on the model and desired performability. To record electric guitar amplifiers, use Shure SM57 microphones. SM57s are sold from $75 to $100 a piece. Buy as many microphones as your board has room for. Connect each microphone to the cables coming from your mixing board.
Test your equipment. Before you start recording, make sure your equipment works properly. Make a few recordings to test soundproofing, levels and the compatibility of your software and sound gear. When you've tested everything, start making records!
Consider a digital recorder. If you are strapped for cash and can't afford computer software, a mixer, power amp or other gear, consider using a multi-track recorder for all your needs. Digital multi-track recorders are often all you need to record. They are affordable and often to do the work many expensive pieces of equipment. The only other equipment you will need are microphones and cables. If you choose this route, buy a recorder with at 8 channels, equalizer and CD burner (see Resources below).