This is a great guide, and it explains factions very well.
However, I'd like to add and change some things:
1. In "Setting up your faction", you suggest your first action should be to design the faction and it's morals. This is one way of setting up your faction, but another way I like to use is just by creating some random ships, testing them, improving them and trying to make a variety of ships that either all complement each other, all have the same kind of look, work the same way or naturally just have some kind of nature to them. For example, if you end up with a lot of small fighters, you won't start a faction that prioritizes mining or trading.
2. I believe you should always think of some kind of moral code for your faction, how it would behave in any given circumstances. Is your faction very agressive? Or do they seek peace? Or do they don't care for politics & relations and just want to have fun, or trade, mind their own buisiness, create an empire, etc...
These are just some things I think can help starting factions aswell. Anyway, this is a really good guide and on behalf of all starting factions, thank you .
EDIT: Yes, I am back. This time I won't leave so soon after returning. At least that's not my plan. Now if you'll excuse me, I have some catching up to do, there have been a lot of updates.