Listen carefully to the piece of music you wish to arrange. You should be able to discern the primary melody of the song from the supporting roles. This can be slightly more difficult when arranging a piece originally played on a single instrument, such as an acoustic guitar or piano, though the process should be simple for a person with a musically trained ear.
Map out the structure of the piece you're working with. Most songs have a simple verse-chorus-bridge-chorus structure, with additional verses or choruses added in. Assign a letter value to each component of the song. For example, a verse could be represented as A, while the chorus could be B. Indicate variations in these components by adding a numeral to the letter. A song structure might look something like A-A1-B-A2-C-B-B.
Understand the purpose of your arrangement. If you're arranging a pop song to work as a commercial jingle, you'll probably have to significantly reduce the length of the original composition. Boil down the piece to its essence, such as the chorus. If you're reworking a classic favorite to be played by your rock band, consider adding variations in order to make the music your own.
Consider the instrumentation of the musical group you're arranging for. The process of arranging a classical piece for an a cappella group will be very different from arranging it for a heavy metal band. Assign key features of the original song accordingly. For example, a piano melody could be sung by a lead vocalist or played by an electric guitar player.
Pay respect to the original composition and be wary of copyright laws. If you wish to include an original or modified version of a piece in a commercial product, such as a TV advertisement, you'll need the permission of the songwriter. For example, an Of Montreal song is featured in an Outback Steakhouse commercial. Outback Steakhouse had to purchase Of Montreal's permission first in order to legally release the commercial.