To organise a festival contact local bands and have seven or eight play throughout the day. (Get them to play for free in return for the exposure.) You could also put on local comics and poets to entertain the crowds.
A pub garden, park, car park, or even a farmer's field could be ideal for hosting such an event. Make sure the location has suitable access, won't turn into a quagmire if it rains, and has ample free parking nearby.
Organisational time and costs shouldn't be underestimated, but neither should the profit. To organise a festival you may need to organise staging, seating, a PA system, drinks licence, and other side-shows and attractions.
Booking a local celebrity to give a speech and present an award to the best act will help generate local enthusiasm for the event and draw in the public.
Advertise wherever possible in the local paper, in schools, on the radio, and leaflet people in the street. A reasonable entry fee should encourage people from all walks of life to savour this unique event.
Increase your earnings by allowing food and gift vendors to set up stalls. You could charge a standard fee, or arrange a percentage of their profit as payment.
If you are unsure of what is expected at a festival go to a range of festivals like v festival, reading festival or any good music festival and copy good ideas for your festival.