The first step to a water feature is to select the proper location of the water feature. It is important to design the direction of the waterfalls to drop towards the most popular place in the yard.   Once you have selected where in the garden this water feature will be, and what direction the cascades will fall, build your retaining wall to support the waterfalls.

Against the retaining wall that has been built, you will want to tamp down all the dirt.  This fill dirt should be the soil excavated from the reservoir or pond.  If you are planning on a tall waterfall then it is important to bring in more soil.  You will want to tamp down the soil every 12″ with a hand tamper or plate compactor.  This hill that you are creating will need to face the entertaining area of the garden.  Find out where you will view this waterfall from the most and aim the waterfall towards that part of the yard.  After you aim the cascades in the right direction you will next chisel out the hill into a simple staircase.  If you would like more interesting waterfalls you can vary the heights and create different directions of the stairs.  However when you are building your first waterfall, starting out simple is the best answer.  Later, when the rocks are set in you can manipulate the drops and cascades further.  Tamp down the staircase of cascades and soak the entire feature with water.  Let the cascade section dry for an hour or so as you finish off the pond or reservoir, and you are almost ready for the liner.