Lets say you have a source instance as (https://source.servicenow.com)

And a target instance as (https://target.servicenow.com)

Step#1: To create a Clone Target, Login into your instance which needs to be cloned.

Navigate to System Clone > Clone Targets. Click New.

Create a new record like:

Step#2: To start the clone processNavigate to System Clone > Request Clone.

Select a Target instance to receive the cloned data.

Step#3: Confirmation message you would see:

Step#4: Check the clone progress (System Clone > Active Clones and select a request):

MOST IMPORTANT: Be careful about your source & target instance, you would always go to sourcing instance to make a clone instance.

For More Information:

https://docs.servicenow.com/bundle/madrid-platform-administration/page/administer/managing-data/task/t\_StartAClone.html