There's no one way I create my sims. I only have a couple that I've tried to do as Simselves - and they honestly don't work right as they're too tall. :smiley:
Generally it depends on why I'm making a new sim.
If I'm testing/messing around, I'll start with whatever the game throws up at me and add a few tweaks, and in the course of those tweaks work out a personality and a backstory (I would do this all the time back when I painted D&D miniatures with my dad as a kid.)
If I'm specifically starting a new challenge/story/etc, then I'll put a little more thought into the sim before I start - but often the only part of their look that's in any way predetermined is by their type - sporty, scholarly, feminine, masculine, fashionable, relaxed - and their age (I tend to dress adults and elders more conservatively in terms of skin coverage than I do teens and YA.) Things like hair/eye/skin color I generally don't mess with (unless I think the randomly generated combination looks off - some skin tones just don't work with green hair, ya know? - or has shown up too much in my play lately) Features I may tweak for better aesthetics, but unless something really bothers me, I'll usually just roll with whatever the game gave me.
I've made a few "fan art" characters, but that's not usually my sort of play, so they're either there just because, or to add color to the landscape.