Both players choose armies to the same agreed points value. Most players find that 2,000 points is about right for a battle that will last over an evening. Whatever value you agree, this is the maximum number of points you can spend on your army. You can spend less and will probably find it is impossible to use up every last point. Most 2,000 points armies will therefore be something like 1,998 or 1,999 points, but they are still '2,000' points armies for our purposes.
Once you have decided on a total points value it is time to choose your force.