After you create a template, you can clone it to a template. Templates are master copies of virtual machines that let you create ready-for-use virtual machines. You can make changes to the template, such as installing additional software in the guest operating system, while preserving the state of the original template.
Verify that you have the following privileges:
Virtual machine > Provisioning > Clone template on the source template.
Virtual machine > Inventory > Create from existing on the folder where the template is created.
Datastore > Allocate space on all datastores where the template is created.