how do I start the game when I go to the inn it says no characters available. . .

It's been a millenia since I played MMI, but I remember MMII very clearly (I played that just a few years ago).
Try cycling through the different towns to see if any characters show up. Also, be sure that you're not selecting hirelings (assuming there are hirelings in MMI -- I think there might not be).

There should be some pre-generated characters residing at an inn somewhere. If not, create characters from the main menu.

I hope that helps. If not, someone else will jump in.

I tried it just briefly and seems like what you need to do is...

1) in the main menu, type "1" to enter the character menu of inn 1
2) Add characters to your party with Ctrl+letter
3) Press "x" to enter the game

I have no idea what the "Go to town" option of the main menu does...

Aah stupid me. I was just pressing "#" and wondered why it always went to town 3. : P Whew, glad I'm not planning on playing that game, too demanding for my brain.

Thank you for assisting with this. I really appreciate it.

I'm having the same issue. I've tried every option on the screen. Nothing gets the game going. I can see the characters, etc. but the adventure never starts.

You need to select a town, 1-5.
That's what the # sign means.

And then hold Control down and select the letter of the character. Know that you should select the letter of more melee class characters first. Leaving magic and robber types 4, 5 or 6. but also understand in battle enemies can "surround" you. Your max party members is 6 in MM1. MM2 I would still advise 6, as you can always hire hirelings for 7 and 8 positions. Positions 1, 2, and 3, would recommend melee. 4 robber. 5 cleric. 6 sorcerer. Once experienced, you can change this all up.

Beginning of the game, or newly created characters, are in town 1. When you save, your party can be in one of the other towns (2-5)(including your hirelings, or newly saved/quest related hirelings that show up in one of those towns in Might and Magic 2).