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You will need a flat spot; ideally, your beacon will be close to your home. Place three rows of three blocks to create a three-by-three, nine-block total base. Select the beacon unit, then select the middle iron block. The beacon should light up almost immediately. If you want to increase the beacon's power, you can add a five-by-five, 25-block base directly below the three-by-three one. You can add a seven-by-seven, 49-block base below the five-by-five, and you can add a nine-by-nine, 81-block base below the seven by seven. Your beacon can't have a base larger than nine blocks by nine blocks.
Find a place to put your beacon. Place the iron blocks on the ground. Place your beacon unit. Consider adding more layers to the unit.