Find a place that is comfortable for you and or that inspires you. Places like bathrooms and tunnels are good due to their acoustics, which create a "surround sound" effect that allows you to hear yourself as you play.
Start by experimenting with different chords by playing each chord you like in a pattern until you have created a progression. A basic chord progression can range from three to six different chords. Write these chords down on a piece of paper. It helps to hum the tune as you match it to the chords you are playing on your guitar. For help with chords, see Resources.
Add lyrics to your song by writing them down on paper. It helps to choose a theme like love or politics, or anything that inspires you to build upon with lyrics. A basic form for a lyrical composition is four to eight lines of a first and second verse and two to eight lines for a chorus that you can repeat as many times as you like. The average song is timed to about four minutes. After you have written the lyrics, it helps to write the chord progression for reference above the lyrics.