How to give a child a timeout?

I'm 23 years old and I babysit 2 little girls, Emily and Rachel. Emily is 5 and Rachel is 2 1/2. They both are very wild, hit, throw things, say no, won't obey me, etc. I love them very much and their parents say to put them on timeout when they misbehave but I have no idea how to. Any ideas on how to put them on timeout so they still know that I love them?