What you are talking about is starting a small business. The Small Business Administration (The U.S. Small Business Administration | SBA.gov) has many resources to get you started. Check your state government's site for information about becoming an LLC to limit your personal liability in case of any lawsuits against your company. I'm not sure what filing fees Washington charges, but if similar to Indiana they should be about $300. After that you need to show a profit within 5 years or your company will be declared a hobby and delisted. I'm not a legal guy, but I did start an LLC for my freelance graphic design business.
The whole question of if you start a label is one you need to ask yourself. Are you willing to do promotion for your artists? What do they get from signing with you? Where will you make money?
No matter how casual you think this label could be, when it involves money it becomes serious business. Read this interview of founder of Alligator records, Bruce Iglauer (Chicago Blues News: Alligator Records). Talk to a label owner, write a business plan, draft an artist contract, and secure capital.