Quoted from ifpapinball:

The Director's Guide on the PAPA site that we link to is a great resource. As for a step-by-step layout, it's hard to put up something that works for all situations, but I'm more than happy to work specifically with you on developing a format I think would work.
So many variables are up in the air when narrowing down a format that can work for you and your player base:
- Public location or private location?
- If public, how is your relationship with the operator/location owner?
- How many machines are physically available?
- How long would you like the tournament to last?
- What kind of commitment level of participation do you want from players?
- Do you have access to the keys to be able to get into the machines for these events?
- How many players do you expect to have show up?
- How often do you want to run events? (One time thing, monthly, weekly, etc)
Those questions are right off the top of my head, and depending on those answers, my recommendations for what to do vary GREATLY.
The biggest advice even after you get started is to work with your player base to see what THEY want. I know over the years I've morphed formats from something into something else based on the feedback I've gotten from the players participating, and it's worked quite well.
PM me and we can definitely work through these variables for your situation and get you set up with a format that I think would be successful.

Quoted from swampfire:

I don't know why it's so hard to understand that if you restrict tournament participation in any way, it's not an IFPA tournament anymore.