Safety
Safety when wrestling is the most important aspect of all. This is something I try to drum into all feds new or otherwise. I am probably stating to sound like a broken record mentioning safety as often as I do, but this is the most important part of creating and wrestling in a backyard fed. Never do something you are not comfortable with (ie if you are not comfortable with doing moonsaults or backflips don't attempt them, regardless of how many other feds are).
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Wrestlers
Finding others to wrestle goes without saying, but finding the right people to wresle is important. The people joining your fed to wrestle must want to wrestle. If they are just joining because eveyone else is, it is quite possible that they may get bored or lose interest a few months into your feds creation and leave. This will certainty end your fed before it really gets started. People with experience in backyard, amateur or if possible (though unlikely) pro wrestling will be a big help in getting the fed started. If no one has wrestled before then you will need loads of practice (see below).
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Location
Where do you plan to wrestle? In your backyard, your best friends backyard, a park where? If you can find a permanant location, it will be a lot easier to practice and plan your events. If you need to find a new location each time you want to practice or have an event it will affect your feds progress. Having a stable location allows you to get comfortable with the area and use the area to its potential. It will also make setting up for your event less of a hassle. If everyone has to collect all the equipment, props etc. and travel to a different location eveytime, they could lose interest, however if eveything is stored in a permanent location (such as "freds" backyard) everything will be in one place and not get lost or damaged in transit.
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Where do you plan to wrestle
Are you going to do battle in a backyard on the grass or on a trampoline, or are you going to build a ring. If your fed is just starting off then more than likely you will not be able to afford to build a ring. Quite a few feds out there wrestle on a trampoline which for a fed that is just starting out is the best and safest (yes I'm back onto the safety thing again) choice. Let's face it wrestling in most cases in all an act and you are not really trying to hurt each other (and if you are you have serious problems) so wrestling on a trampoline will hurt a lot less when you are bodyslamed than it would if you were bodyslamed onto the ground.
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Wrestling mats are another option and a good choice if your fed is an indoor fed. A number of mattresses (if some are available) will make good padding if wrestling mats or a trampoline are not possible. If you want to show how tough you are (and increase the risk of injury) wrestling on grass or bare ground will make a somewhat painful arena. Remember that even the mainstream pro wrestlers of the WWF and WCW have a dirty great big spring under the ring to absorb the impact. Try telling Stonecold Steve Austin he is a whimp for not wrestling on grass. :)
If you are going to build a ring there are stacks of different ways of building one (none of which I am going to mention here). Go to Constructive Ideas if you want ideas on building a ring. Some backyarders say that true backyard feds don't use rings, but this is all personal choice and does give your fed a more proffesional feel than on the grass.
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Style of fed
Yes I know what your answer to this is going to be, hardcore! Evey fed these days wants to go hardcore, hiting each other with weapons, wrapping up your opponent in barbed wire, setting fire to each other, bleeding and all the other extreme things that made Mick Foley and ECW what they are.
I try to discourage hardcore for two reasons one because it is dangerous (see my paragraph on safety) and two it is not really wrestling. Wrestling is all about grappling, submissions and dynamic moves such as moonsaults, jumping off the "top rope", sidewalk slams etc. Two opponents belting each other over the heads with pieces of wood, trays etc is not really wrestling.
A backyard fed can be entertaining without being hardcore and beeding everywhere. If you have not guessed by now I am not a hardcore fan (boo hiss), but if you are set on being harcore be careful and don't force someone to perform in a hardcore match if they do not feel comfortable doing so.
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Practice and Experience
Don't expect to be the next Shawn Michaels on the first day of your feds creation. All the moves you see on TV in the WWF, WCW etc. may look easy, but this is due to the fact that they have had professional training on how to fall without getting hurt and how to deliver a move to an opponent with hurting themselves and their opponent. Don't start piledriving each other on the first day of practice, in fact don't try those type of moves until you and your other wrestlers have had extensive practice and are comfortable doing easier moves. Try to practice falling to start with, then work your way up to more and more ambitious moves as time and practice sessions go by. Don't rush into perfecting all the moves. Practice one or two moves per practice session until *everyone* is comfortable with their progress. I strongly urge you not to use the piledriver at all as it is the one move that has caused move injuries and in a few cases death (yes you read correctly, death!) than any other wrestling move.
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Realism
If pro wrestling didn't look real, it would not be as popular as it is. When wrestling an opponent you both need to sell the moves. If you get hit make it look as though it hurt. If you get suplexed, don't just get straight back up, make it look as though it hurt and you are injured. Wrestling is not just about throwing your opponent around a ring, it is also about acting. If you get beaten up in real life you are not going to jump straight up and say "well I'm glad that is over", so think about what sort of moves is being performed on you and think where it would hurt and act accordingly.
The realism side is far more important if you decide you want a normal fed and not a hardcore fed.
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Originality
If you want your fed to be popular and be entertaining then be original. Don't copy the names and personalities of the wrestlers on TV. Think of your wrestling style and make up an original name and or gimick. If you are a high flyer think of a name that reflects this, or if your style is as a brawler again something that reflects this.
Don't all wear the same type of costumes either. For example if you all wrestle in T shirts don't all wear black ones, otherwise your fans will get eveyone confused with each other and not know who is wrestling who. Costumes don't have to be elaborate, but they should reflect your name and style.
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Storylines
Storylines are something that a lot of feds neglect to focus on. Think how less entertaining the WWF would be without the on going feuds etc. Original storylines with feuds, double crosses, grudge matches etc is something that seperates a good fed from a bad one. It does not matter how hardcore your fed is or how good the wrestling is - if your storylines suck, more than likely your fed will not be as popular as it could be.
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Naming your fed
Ever fed needs a name to identify it from all the others - this is something that really needs to be thought about. There are more and more feds out there with the same name and even more appearing everyday. Try to stear away from "Backyard "something" Wrestling, Hardcore "something" Wrestling or Extreme "something" Wrestling". These three words backyard, extreme and harcore are the most commonly used names in a federation. Think of something original that will make people remember your fed.
I often will receive messages from a commonly used fed name (for example Hardcore Championship Wrestling) and with so many feds with that name I have to go searching for which fed it is or sometimes guess which fed it is. If you have a fed name that no one else does your fed will be identified by the backyard fans and not be confused by another.
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Props
You will no doubt want props (such as weapons, tables) etc. to hit each other with, or thow each other onto etc. There are so many things that are used as props that if I were to mention them all, I would be typing all night. Think about what sort of props you want and what they should be made of. Tables made of thin wood are the most common (usually a board between two chairs). Constructive Ideas once again can give you some ideas, or if not post a message on the message board asking how to make a certain prop or even email an existing fed and ask 'em how they made their table, weapons etc.
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Getting Noticed
You will want your fed to be noticed by the backyard fans and creating a web site is probably the best way to attract attention towards your fed. Making your site as appealing as possible (ie. good background, colours that don't clash, etc.) is the way to go. You will want to start with info on the fed itself as a sort of introduction to get people interested. Next a roster or bio's on each wrestler is a good idea. Give each wrestler his own page if you can detailing the wrestler with as much info as you can. You should then consider the following. An events page showing when your next event is or detailing the results of previous events. Updates to the various storylines that have occured. Pictures of each wrestler plus pictures from actual events or of wrestlers in action, or video files if available. There are many other things to add appeal such as guest books and message boards (though both can be prone to abuse), links to your favourite other feds etc.