i troll the font sites looking for fonts i think will be good to cut, i make the patterns up in a program called serif pageplus ( free version on their site) although i use x5 for mine.
The patterns are cut down, blown up, widened, shortened pictures from the internet (copyright free) that i adapt to fit what is required by the customer, i have just been asked to have a stall at a gymkhana in 8 weeks time so i will make several horse related ones, stable door hanging ones and a couple painted to show them off.