1. A favicon is the small Icon that you can see in the browser tabs, address bar and in bookmarks of many popular websites, though any one can do this.
2. To do this you must make your logo into a 16x16 to 48x48 sized .ico file and upload it into your web server.
3. If you feel difficult to make an .ico file, you can easily do it through any Icon Generator website, where you just need to upload the file that you have. The icon generator will make it into any size that you prefer and change it as an .ico format file.
4. To upload the favicon into the web server just copy the file and paste it into the public_html folder of the ftp account.
5. Now you may know how to create a favicon and create a prosperous look to your website.

Note: After you have uploaded the favicon suddenly you may not see the change. This is because of your browser's cache, so clear it and refresh your page. Thus you can now see your new favicon how it enhances the look and feel.