When taking on the project of being a GM, first you have to decide what setting and system you want to use. Most of the time this is a group effort, because you want all your players to like the system you are using. If you choose a genre and system, but make up your own world, (as I love to do), there are a few things you should consider:
1) Magic or no magic. Depending on the system this may not even be a question. You might want lots of magic, or no magic at all. Maybe magic is hidden or hard to find or even frowned upon.
2) Treasure. Will you hand out a lot or be stingy. These are things to be determined before you start so you are consistent through out the campaign.
3) What races do you want? Some people like lots of races, while other GMs don't like certain races at all. Perhaps the elves are the bad guys in this world and you don't want your players to be elves. In my world there are no gnomes or halflings.
4) Where do you adventure? Is this a water world, sky world, or just a normal on the ground world. It is good to establish this before you start so your players can take skills that will help in that world.
5) What is the main evil? This seems trivial, but every hero wants some huge darkness to fight. Even if they don't get to that evil right away, they will work their way toward it.
Part II Tomorrow