Step1
Obviously, the first step in forming a great band is the desire to perform! If you can play an instrument fairly well, have mastered covers of various songs (or written a few yourself), and know how to relate to others, you're "good to go"!
Step2
Now ... find some other people to join your band! They should play instruments that would complement the group and give it a fuller sound. For example, if you play guitar, find a drummer, bass guitar player and perhaps a keyboardist.
You might have to advertise in your local newspaper. If so, make sure that the people involved in the band's creation share the same desire and energy as you. You might have to "audition" some who answer your ad, and, here, you'll want to "interview" the individual as well as hear him/her perform.
Step3
Once you have a line-up, get together in an "unplugged" setting. If you only have electric guitars and bass, see how you "mesh" on various songs without amps or PA systems. Chat with each other and bounce some ideas around -- just to find out how you work together socially. During these, the drummer can keep the beat on the back of anything hard and resonant.
Step4
Once you've found you can get a coordinated sound together, then it's time to find a good place to plug in those instruments and practice a few songs with amplification. If anyone has a garage or basement you can use, then it'll save time and money. Just don't make the music so loud as to awaken neighbors or attract the police (some jurisdictions have noise ordinances. Find out if your area does to be on the safe side.)
Also be sure to include a couple of good microphones with reliable stands for vocals.
Step5
Make a solid rehearsal schedule that's acceptable to the other members of your band. Rehearsals should be no less than three hours in length; practice "cover" songs (ie, songs by other artists) but save the last hour of the practice for self-compositions if you have any. At the first rehearsals, formulate a catchy name for the band -- one that's easy to remember and reflects either members or style.
Step6
When practicing, start a song with a confident "attack." You see, when a band performs, it has about thirty seconds to get the audience to "wake up and take notice." Don't be tentative or hesitant to begin a song in rehearsal; even if it's kind of harsh at the beginning, you'll have time to "fine-tune" it as you practice it again and again.