Like much of writing, creating an outline is completely up to how you want to do it. There are as many methods of outlining as there are styles of writing. The good news is, there is no right or wrong way. The important thing to remember is that an outline is meant to be a loose guide, not a strict roadway that you are forbidden to divert from. In fact, I highly encourage you to divert and allow the story to organically move in the direction it needs to move, to a point. Whatever you write~be it in the outline or outside of it~has to be important to the plot, character, or development of the story. Everything in your novel should have a reason.
Here is how I do it. I start my outline before I start my novel because it helps inspire me. A lot of people think using an outline limits your story but it doesn't do that to mine. It actually helps my story expand and grow into something even better than I had planned. I start with the main point I want to cover in the first chapter, then I list bullet points of things I want to touch on in that chapter.
I cover all the points that will come into play later or that bare weight on the story. This leaves me a lot of room to expand or shrink things as needed. I write the entire outline in this manner. I write in pencil, allowing myself room for error, and I use the margins to jot down even more things I want to cover. For those of you who outline, how do you like to do it? And how do you think it benefits you?