Decide on the type of water feature. Ponds set into the ground, above ground ponds, waterfalls, streams, fountains---the choices are seemingly endless. You also have to choose the style of the feature, which ranges from completely natural looking, made with native materials, to highly formal. When you see a design you like, perhaps in an office courtyard or someone else's house, or in a garden magazine, take a picture or clip it out, and build a file for later reference.
Decide where to locate the water feature. Place the feature in the rear of the yard, off by itself, if your intent is to create a quiet oasis. The opposite approach would be to place the feature where it can be seen from several different windows in the house, so as many people can enjoy it as possible. A water feature allows you to take a portion of the yard that is not utilized, such as sloping area in the back of the property, and turn it into something pleasing to look at.
Choose the water feature liner. Lining a pond or stream allows you to keep the water contained and re-circulating. The most popular types are preformed liners and flexible rubber liners designed to be durable enough for ponds. Preformed liners come in many different shapes and are easier to install. Another more expensive option is to form the water feature with concrete. But then it is a permanent fixture, like a swimming pool.
Excavate and prepare the site. With a pond, make sure the perimeter edges are level. Be sure to remove rocks that could damage the water feature liner if they push up through the soil. Place a layer of sand on the bottom and sides of the water feature. Then add newspapers, old carpet or other cloth material to further protect the liner from being punctured.
Put edging around the water feature perimeter. Many different types of materials can be used to add a finished look to the water feature, including river rock, flagstone, and bricks. Your choice will depend on the style of water feature you are designing, and the design style of your home and patio.
Install the pump. Submersible pumps are available with different pumping volumes depending on the scale of your water feature, particularly how high it has to pump the water, and for what length. A pump with insufficient power will not provide the vigorous water flow you need. Too powerful of a pump will make the water flow too violently.