how do you factory reset ps4?

back up your saves first. with ps plus they're probably already in the cloud, but check under application saved data management in settings to be sure. no plus, copy them to a usb stick. a full initialise wipes everything and there's no getting it back.

Settings > Initialization > Initialize PS4 > Full. Takes a while. If you're selling it, deactivate it as your primary PS4 first (Account Management in settings) or the next person's going to have problems with your account still tied to it. And if it won't boot properly, hold the power button until the second beep to get safe mode, option 6 does the same reset from there.