The offshoot that has developed on your sago palm can be removed to produce a new plant. Remove it from the trunk of the “mother” plant with a sharp saw. The offshoot can then be planted in a pot using a mixture of equal parts of peat moss and coarse builder’s sand or a well-drained potting soil. Place the pot in a partially shaded location. Keep the soil moist but not soggy. Roots should develop from the base of the offshoot over several weeks. It is probably best to keep it in the pot for at least a few months until the root system is well developed before planting it out in the landscape.