Hi Luke
One of the bands I play in is a function band. When we started off six years ago we played gigs for a max of £600-£800 just to get on the circuit and build a reputation. Plenty of social club gigs too, but they were soul destroying!
From the start we were a slick outfit, with a truly special lead singer as the focal point for the band. We registered with loads of agents but little work came from them and now almost all the gigs we do are from referrals, repeats, and word of mouth. Six years on we earn a lot more than the £600 per gig we started. Sure we do the odd cheap (and, for charity, free) gig, but for the most part we can charge full whack because we always come highly recommended. That sounds arrogant but isn't meant to be; we have faith in our product and our clients do too.
So, my advice is start out cheap and make sure the band works well as a unit, if it does then you can go far pretty quickly.
Best of luck!
Gareth