The first thing to consider when it comes time to build a waterfall is size. A huge, high waterfall doesn’t make much sense unless you are also dealing with a huge pond.
The goal should be to create a peaceful, gentle flow. This means not only having a waterfall that isn’t too high, but that cascades over a gently slanted hill of rocks down to the pond below.
The next step is in placing the rocks.
There are several schools of thought on this.
Some believe using natural rocks in fully creating the waterfall formation itself is best. Others promote the use of fiberglass, pre-molded rock formations for greater structural stability and ease of construction. Either way, you want the base structure of the waterfall to be trough or hill shaped, possibly even lined with the same material you used to line the pond in order to prevent water runoff.
Then the stones can be placed to cover it up.