The first thing you do is punch holes with your needle along your pattern lines, going all the way through the cardstock. Then just stitch away. I cut mine out about 1/4 inch away from my stitching and used embroidery floss as a hanger. I also embroidered a hand drawn star to hang from the bottom.
I love the way mine turned out. My students did a great job on theirs as well. I am really proud of all of them and how much they have improved in their technique so far.
Here is the pattern for you. The "thought bubble" cloud was a template on my computer and I left off the ovals for my class. And, even though I printed it out for my class, I think it would be better to trace the design onto your paper using a light box or window.