This one is easy. All you need is a length of string, a pencil, something to anchor the string (pin, nail, etc.), and whatever you are drawing on.
Step 2: Draw
Anchor one end of the string in the drawing surface. This could mean pressing a pen point down into paper or tying a string around a nail. Then tie a pencil, pen, crayon, or any other writing utensil at the other end of the string. The length of string will be the radius of the circle. Then, while pulling the pencil tight on the string, draw a circle. If the string was kept taught, the circle should come out perfectly.