[disclaimer: there is not just one true way. But this is mine and I really believe in it]
For me, designing your group is the most important part of the character creation process - much more than designing your individual character. My preferred method is to meet up with my friends away from an event and talk over our ideas, as between us they will get refined and we can work out the best way to get the most fun out of our events.
What usually happens (with the mates I most often do this with) is that we all take it in turns to pitch ideas and see which ones really appeal to us. Maybe someone will say something and someone else will pick up on a detail and say ‘hey, we could do that, but push it harder’. Often we will discard an idea that initially seemed promising because we realise it doesn’t have the potential we first thought - being willing to do this is vital.
Once we have got some ideas to mull over, the first thing we do is test them with key questions. Number one is ‘what will we do at events?’ This kills lots of bad ideas stone dead.
For example, I often see people pitch ideas for groups based on what they will do on the battlefield. But battles are three hours (and maybe a skirmish) of a long weekend. If you don’t know what you are doing the rest of the time, your concept isn’t working well enough yet. So you could say ‘we’ll be League mercenaries’ and I will be instantly bored. If you say '‘we’ll be League mercenaries who go round the bars starting brawls with each other, but are secretly using this as a cover to gain political support for having Siroc become a fifth League city’ then suddenly you have my interest, because that is enough to fill many events with fun.
Your group should have a strong sense of identity of its own (which you can reinforce through consistent costume, but that is a whole other topic). You know you have really made it when someone meets one of your group for the first time and instantly has some preconceptions. If someone backs away from your Varushkan ritualist for fear you will curse them the moment they hear your coven name, you are winning, just as much as if someone assumes you must be glorious because they hear which Dawnish noble house you belong to. Having a reputation is really cool, and it is a load easier to do at a fest larp as a group than as one person. Out of 2000+ people on the field there are hundreds trying to be known as badass fighters (and hardly any of them are well known), but I could name you far more groups with a reputation for being nails. That applies to pretty much any type of character/group.
On that basis, agree amongst yourselves that you will create characters that reinforce that identity. If you all decide to play Brass Coast hakima, it’ll fall flat if half the group decide that they want to be the one exception who is a corsair.
Common pitfalls that I would recommend you avoid:
- Many people will design a character, then look for a group. This often goes wrong, as the character is rarely a perfect fit. Often a very bad one. If you join an existing group, make a character that fits in, rather than expecting them to adapt for you.
- Sometimes a single player comes up with a group in isolation and then looks for other players to join them. This can work, but IME you find that one players feels like they have ownership of the concept and is not open to discussion. That leads to people second guessing themselves in play as to whether they are ‘doing it right’.