You will need to connect to a PC/Mac to start the RESTORE process. Once it is done you will then be able to restore from the cloud.
Make sure you have your iPhone plugged into your Computer (via iTunes) or you are on a WiFi network otherwise, it won't complete the reset until you are connected.
Once iTunes detects the phone, select Restore iPhone Backup
During the reset, "everything" is erased, settings are set back to factory defaults and iOS is reinstalled.
When the phone restarts, set it up as new and follow the prompts or restore from your most recent backup within iTunes or from iCloud.
Then reinstall all of your apps, music, setup iCloud to sync your Contacts, Reminders, Calendar, Notes, etc.