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Creating a New Level Folder and File

First, we'll have to create a new level file where all the data for our level will go. Go to File -> New to open the following file dialog.

Choose where you'd like to save your level file, preferably the folder Levels in the project's Asset directory, before giving it a name in the Level Name field at the bottom. The following window appears once done.

We are going to make a small level, so set the Heightmap Resolution to 128x128, and then click OK.

After a while, you'll see a checkered floor and blue 'sky' in the Viewport. 

Great, we now have an empty level. Let's make that checkered floor a bit more interesting!