I usually crack out a basic bass riff, then maybe dirty it up or not with a Big Muff Pi.
Paul the guitarist will play with chords round the bassline.
We hah and hum for a while, have a beer, then practice the whole song, usually it's repetitive process until one of us says "what about?" and we try those ideas within the tune.
Regarding the lyrics, we have a stock of songs that we try to fit into the new tune, or we will start saying any old thing until it fits. UIsally we have jst one line and will slowly change the words as the tune develops.

