Answer: This is a very complex question because every situation is unique. First I would suggest you thoroughly read and understand the directions that come with the kit. They should answer many of your questions.
However some general pointers would include that you need a nearby electrical outlet with a GFI or ground fault interrupt for safety.
You need to be able to fill the water reservoirs at the top and bottom of the waterfall by garden hose. You will have to top them up periodically in dry spells and to replace water lost to daily evaporation. If you have fish as well you may need to pretreat your water to remove harmful chemicals. You may also need a filter.
Installation would be per the directions, but be prepared to spend some time making sure it is level and does not leak. A leak can cause water loss and if the system runs dry you will ruin your pump. Also locate the pump (and filter) where it can be easily accessed for servicing. You may also want to plan how to hide it from view.
Placement is by personal taste. I like to see a water garden located in full morning sun, with afernoon shade. This allows enough sun for the plants to be healthy but helps cut down on algae by keeping it a little bit cooler during the summer. You need to put it somewhere that it can be seen (and heard) from your favorite outdoor sitting area and also from your most used indoor windows so you can enjoy it the most. Depending on whether your overall scheme is formal or informal, you will want to work this into a logical location with an appropriate setting and backdrop.
Last but not least there may be local ordinances requiring a fence around your water feature for the safety of small children. If that is the case you need to plan a way to incorporate that into your overall landscape plan.
You may also want to talk to some experienced water gardeners or nursery staff who can help you review your plans and point out any potential problems with it. This can be a lot of work but the results are so enjoyable -- have fun!
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