First you need to grab your tape and take measurements!
Only 2 are needed, the length from your neck to where you want your shirt to end, and from one arm (where you want the sleeve to end) to the other. Get a friend to help you for a more accurate measurement.
Grab your fabric, making sure of course you have enough for the dimensions you just took. Fold fabric in half so it is a double-layer. Make sure the folded side is the top of your "square" of fabric.
Now you are going to mark your fabric about halfway down on both sides, left and right. Also mark the bottom into thirds. Draw a dotted line to bring the left hand mark on the right side to the first mark on the bottom. Repeat for the right side. Now grab your scissors and cut! See picture.
Next you need to flip your fabric inside out. Sew on both sides, through both layers of fabric.
Now you can cut out the whole where your head's going to be! You can make it however long you'd like.
Try on your creation!
Experiment with different variations of ways you can fold, tuck, and manipulate the fabric to suit your tastes.