Picture of Hand Cut Vinyl made into a vinyl Decal
Here is an example of how to make a vinyl decal by hand cutting. Note that the look will produce a less professional style and will not be ideal for each need. Sometimes combining techniques from hand lettering and vinyl cut by a machine are a good combination..

I made it at TechShop http://TechShop.ws
Submitted by SFlettering for the Instructables Sponsorship Program

Step 1: Cut Letters

Picture of Cut Letters
Start out with a decal in mind and make sure you have the right supplies including

vinyl for cutting
cutting tool
cutting mat
contact sheet paper (clear plastic)
some extra paper that vinyl sticks to and easily removes from as well
additional items may be required