Usually you start with two strips of 12" paper, you can decided what width you want (in the picture it looks like the strips are at least one inch wide, maybe more). The wider the strip you use the bigger the flower will be. With a score plate (I have SU's Simply Scored), you can score at either 1/4" or 1/2" increments. I recommend using hot glue to hold your finished flower (lolly/lollie) to your circle punch. What size circle punch to use? It depends on the width of your flower. HTH!
Oh, Stampin' Up! does sell a die that makes it really easy too, it's on page 193 of their main catalog, 125594, $42.95. You can achieve three different looks with this die depending on where you place your paper on the die.