On the question of whether you should Self-Produce your album (or EP, whatever), there are a few key questions you should ask yourself:
Do you know anything about marketing?
Do you have experience in recording?
Have you worked with session musos before?
Can you speak the speak with engineers?
Is saving money the only reason you're thinking about self-producing?
Even if you answered yes to all of these, it doesn't mean you're ready to make the plunge. You also need to consider that you are doing this for an artist with their money and their reputation – and that artist is you and you may not be the best judge of your own work.
Some general tips:
Be brutal – you may have to make some tough decisions that compromise your artistic vision – don't be precious, do what is best for your budget/sound/sanity. Don't be afraid to ask for help – in fact, where the budget allows it, hire the best. Their guidance will make you better at what you do. Compare your work with the best – whether it's mixing, mastering or artwork, you will benefit from having high standards and direct comparison and being brutal with your critique should make up for what you lack in experience.
Figure out your market
This is the first thing you need to do. For marketing purposes, you need to know who your fans are. For creating a sound you need to know, not only who to sell to, but how to position your sound and what the expectations of that style are. You can't do too much research on this.
Some Common Pitfalls
Thinking that marketing is some kind of yelling from the mountain-top to make people buy your product/go to your show:
“Hey Guys – We wanted to thank you all for coming out to our last show. We appreciated you guys being there and hope you can make it out to our next show at…”
See your fans as one person that you do it all for – it will help you understand their story and how it intersects with yours.
Over/under-estimating the value of your art
Not knowing the strategies that other artists use – whether they are similar to you or not, you should be able to pull apart Beyonces marketing campaign and why it works if you're to understand how to market your folk band.
Record the music
This is the aspect that you'll automatically concentrate on but each aspect relies on the good execution of the others to function. You need to be objective when listening to your own songs, accept any criticism from others and improve your songs without being precious. Some engineering and mixing knowledge is essential whether you are doing it yourself or just working with a professional.
Some Common Pitfalls
Making everything BIG!!! If you listen to hits from any era, you may find that there'll be three or so instruments or elements that are fat, bright, loud while other instruments are supporting these 'stars'.
Leaving decisions until later – partly to blame is the modern recording studio with computers that can save it all whereas tape limited you and forced you to have a plan. Vocals - Vocal production is probably the most important aspect - that's the bit that people relate to the most, and understanding the various techniques and sounds that aren't necessarily apparent when listening to other peoples music.
You're not the best judge of your work!
Cover Design
This isn't just a pretty picture, in fact the picture probably shouldn't be pretty – what's more important - people seeing your mug on the cover (although it is good for your ego) or to instantly understand what your music will do for them and to want to listen to it. The artwork lets potential customers know what to expect from your music – so start with broad strokes – metal albums don't generally have flowers and a pony on the cover. Check out what big brands think when trying to sell you cereal you don't need, colour/font/message are factors in these decisions.
Some Common Pitfalls
Typos – yep, something that shouldn't ever happen but does, a lot. Not print ready art – between bled edge, CMYK and DPI this is a minefield for the uninitiated.
Getting a friend who hasn't dealt with a printer before – see above - you're better off getting a rush job from a pro than laborious work from someone inexperienced.
Manufacturing/Pressing
Do you know the difference between replication and duplication? Replication is a professional process that creates a CD by molding the disk to be an exact copy of the original master. Data cannot be added or changed in this case. Duplication, on the other hand, refers to burning data to a disk, as is done in home computing. Replication is cheaper and more reliable for larger runs as burned CDs can still have errors that older players have trouble playing. As for Digital Downloads as an alternative to physical copies, sure you potentially reach a larger audience but now we're into the streaming vs download debate – streaming generates (next to) no income, but people may not already be aware of your music enough to want to buy it. Before you say YouTube, they are heading in the same direction as Spotify...
Some Common Pitfalls
"I can just burn this at home, right?"
If, after all of this scare-mongering, you're still keen to produce your own music, go for it.