You would start where you finished with the last knit stitch, wherever your yarn is. I think you would sc by inserting the hook into 2 knit stitches, all away around the top, like k2tog. This will reduce your stitches. Then join the last sc to the first one with a sl st, ch 4 and make a dc ch1 all the way around. That makes eyelets to thread the tie through, but I'm not sure it's necessary - you could probably k2tog yo all around, then do another round of knit and BO. Or do 1 round of k2tog, then do a yo k2tog round, then BO.
sue- knitting heretic