Once you know the music you want to release, you will need to set up a deal with the artists. One of the best thing about indie labels is that you can essentially have any kind of deal you want. In fact, it makes life a lot easier when you create a deal that works for you and the artist on a case by case basis. Having said that, it is a good idea to know your limitations and to have some basic principles in mind. Here are some things you'll need to think about:
Do you want musicians to deliver a master, or will you go in on recording costs?
Will you be paying advances, and if so, how much? (If you have a very small budget, your best bet is to try and convince your potential signings to keep any advance small so there is money left to promote their release.)
How will any earnings from releases be divided up? Will your artists get a percentage, or will you split things 50/50? Will the label recoup manufacturing costs and promotional costs before paying?
Will the artists get to approve promotional expenditures over a certain amount? If so, how much?
How many promos/free copies will the artist get? Over that limit, how much will they pay for additional copies?
What is the length of the deal?
Is the deal for just one album or several?
Will the musicians be entitled to audit your books? How often, and what kind of notice do they need to give?