Before beginning to write a synopsis, take out the manuscript and read through each chapter. After you read a chapter, write down one sentence that summarizes what happened. This can be action, such as "Joe discovers his son has run away from home," or inner conflict, such as "Joe realizes he has been smothering his son." The point isn't to cram every bit of the chapter into one sentence, but rather find the most important element or theme of that chapter. Having one of these per chapter will serve as a rough draft of the synopsis.
An arc is the beginning, middle and end of a story. In a few sentences, write down the arc for each of your main characters, as well as the overall plot. The character arcs should focus on each character's inner journey, how they grow and change through the novel. The plot arc should simply sum up the main storyline. Once you finish, use these arcs to figure out which are most meaningful in the story, and therefore must be included when you begin writing your synopsis.
Just as with your manuscript itself, reading the synopsis out loud is a great way of finding the parts that don't flow, and discovering whether or not the narrative is crisp. Read your synopsis out loud - don't mumble or whisper - as if you are a movie announcer describing an exciting plot. The synopsis is a selling point, just like a movie preview, and it should entice the editor.
Critique partners are just as important at this stage of the writing process. Try to find a writing partner who has already read your manuscript to read the synopsis and offer advice on what he thinks needs to be improved in order to best reflect the story. Also, find a second writing partner who hasn't read the manuscript that can tell you if the synopsis makes sense.
If you are printing a hard copy of your synopsis, use high-quality white paper. Generally, 8.5x11 is the size used in the U.S., while European submissions mostly require A4 size. Use a readable font, such as Courier or Times New Roman, in 12-point font. Include the title of your novel, your name and your contact information as a header. Synopses are usually single-spaced, with a space between paragraphs and no indentations. Break your synopsis into smaller paragraphs to avoid large chunks of text.