Decide on the type of song you want. In other words, do you want a funny song for a party for elementary school age children or do you want to create a song that teens or adults would like? You should develop your party song based on the age of attendees; alternately, you may want to make a party song that can be sold via downloads.
Choose a song style. You may elect, for example, to write lyrics that rhyme and are whimsical in nature. You may also want to write a song for a children's party to go along with a game that will be played at an upcoming birthday party. When writing lyrics and composing music for an adult party song, you may want lyrics that are witty rather than rhyming.
Choose a musical instrument to perform your song. If you don't know how to play the guitar, for example, you may be able to write a song where the music can be fairly simple to play, like one composed of three cords.
Pick a program like MAGIX Music Maker, Cubase or Sibelius to create music to go along with lyrics you have written. These programs allow you to mix various sounds using an array of instruments to create virtually any type of music that you want. The result is a professional sounding piece of music (once you understand the program), which is a good alternative to using more traditional musical instruments.