Step 0. Connect your external hard drive to your Mac.
Step 1. Click on Go -> Utilities; or press the Shift + Command + U shortcut key:
Step 2. Find Disk Utility and double click on it:
Step 3. Select your external hard drive on the left hand side of Disk Utility:
Step 4. Choose the Erase tab on the right hand side of the screen, then choose the Volume Format you want. If you are using Macs only, then choosing Mac OS Extended (Journaled) would be good. If you got PCs around or you want PCs to be able to connect to your external hard drive, then the MS-DOS(FAT) is the one you want. (it formats the hard drive to FAT32).