Your first consideration for your social networking site should be its focus. Without a focus, your site will just be a mishmash of Web services and features. While your site may have engaging applications and a snazzy look, it won't make a big impact on your users without that initial focus.
Do you want your site to be a general-purpose social networking community? If so, that means you'll be going head-to-head with some of the most popular Web sites on the Internet. Giants like Facebook and MySpace dominate the social networking space in the United States. In other countries you'll go up against sites like orkut (in Brazil), Bebo (in the United Kingdom and Ireland) or Hi5 (in China). These sites not only have several years' head start, they also have millions of members.
Another option is to create a site around a particular hobby or activity. Giving your site a central theme may help it through the initial launch and inevitable growing pains as you gather an audience. And by choosing a theme, you'll attract users who are already interested in the subject matter. Interested users are engaged users. That means they're more likely to contribute to the community and stick around. If there's nothing interesting for your users to do they'll just leave.
Let's say you've got the perfect theme in mind for your social network. There's a potential audience out there on the Web just waiting for a community that caters to their interests. What do you do next?
Make a list of the features your site will offer. This should include everything from member profile pages to any message boards or messaging services you plan to include. You may have to buy these features from a vendor or build them yourself. Some may even be available in a free, open-source format. Resist the temptation to include everything -- your site will become a chaotic mess if you do that. Instead, choose the elements that best fit your theme and work from there.
You'll need a host for your Web site, too. If you expect your site to grow quickly, you're going to need a host that will provide enough storage and bandwidth to meet your needs. For the most part, hosting on the Web isn't free. Assuming you aren't lucky enough to find someone willing to donate hosting services, you're going to need to put money on your mind.