Welcome to my first Instructable! Comments are always appreciated, and I'd love to see anything you made with this project.

Update: Thank you all for the Front page feature!

Project Cost: Approx. $80 in materials (NEW)

Tools Needed:

Router (or Jigsaw)
Workbench
Clamp
Scroll saw (or coping saw)
Rotary tool with sanding attachments (varying grits)
Sand paper
Palm Sander (optional if you like hard work)
Paint brushes
Rags
Ink jet printer (optional)

Materials Needed:

Wood for the base (I used a solid piece of 4' x 4' x 3/4" clear pine for a nice grain.) - $40
Wood for the letters (I used a small piece of maple, about 1' x 3' x 1/4') - $10
Wood stain - $10
Paint (I used a lovely gold Milk paint) - $10
Varathane - $10
Glue
Scrap MDF - FREE!
A Nail or Screw - FREE!

Gather your materials, and let's begin!

Step 1: Make Your Template and Apply It to Your Base

First: Design your sign

Your first step is to make your template. I made mine in Adobe Illustrator first. Illustrator makes a nice Vector image that you can work with easily.

Next: Print your sign... BACKWARDS

Yup, backwards. At full size. This may span several pieces of paper.

Tape these papers together and trim the excess. Try not to cover the ink with the tape.

Then: Apply your image to the wood

Tape your template ink-side DOWN on the wood. Make sure the image is aligned properly.

Now wet the image with a damp cloth and use a hard object (a pen works fine) and rub the ink into the wood. Press hard and make sure you do a rubbing of all the sections.

NOTE: We only need a rough guide for the sign's outline and any sections we will be ENGRAVING. The letters that we're gluing on later don't need to be applied here.

When you're finished, the ink should leave a rough template for you to follow with your cutting.

Step 2: Cutting Your Base

Next, we cut our base. For my sign, it was roughly circular, so I used a router and a circle jig.

Here are a few useful links for this job:

In my case, I went for a fairly simple version of the Router circle cutting Jig using a screw and a piece of scrap MDF.

I also tested my circle jig on another scrap piece of MDF to make sure it was the right size. This step is optional if you're confident in your measurements. ;)

When cutting your circle, be gentle and take your time. Routers are troublesome and have a tendency to kick back, ruining your work. For my design I had to stop part way and use a hand saw to finish the parts that stick out from the circle.

If you're using a hand jig, follow the outer edge of your template.

Step 3: Sand Your Rough Edges and the Surface of Your Base

Now that your base is cut roughly, it's a good idea to sand off the rough edges and to prepare the surface for staining.

Using your palm sander or just sandpaper, you want to do the front and back here, as we will be applying stain to both.

As well, make sure you sand off the ink template around the edges.

Note For Engravings:

If you are planning on doing any engravings, try to avoid removing the ink template from these sections, but you can always re-apply it later if you want.

Step 4: Cutting/Sanding Your Letters/Ornaments

For this step, I used a scroll saw (not pictured unfortunately), or use a coping saw if you like the hands-on approach.

I applied the template for the letters as I did with the base, rubbing the ink in onto the 1/4" maple.

Then, using the scroll saw with a hardwood blade, I cut the outer edges.

For inside cuts, I used my Rotary tool, or you can use a power drill to drill a hole into the inside of the letters (like with A's and O's) then detached my scroll-saw's blade at the top, sliding the blade THROUGH the drilled hole and reattaching it to the arm. (VIDEO DEMONSTRATION of this technique)

For my design, several of the letters connected together, and I found it easier to do the INSIDE CUTS first, then do the the outside.

Again, take your time and be gentle. You don't want to crack your letters off and have to start over!

Sanding

The scroll saw is lovely and lets you make intricate cuts, but it leaves you with some rough edges. Sand those babies down to a nice, smooth edge with your Rotary tool and some sand paper for the small edges.

Be sure not to take off the nice points of your lettering.

Step 5: Staining and Painting

Now, I did this step BEFORE the engravings. This is because when you do the engravings, you're going to be sanding away the stain, leaving the pristine, white wood underneath. This is much better to add paint to later, instead of painting over stain, which can mess up your colours.

You can see I learned this with the "EST. 2013" text, which I engraved first. This had to be re-sanded later, and was a pain to paint over. See the 2nd image for a comparison.

Apply the stain to your base

Do this outside or in a well-ventilated area.

Stain one side at a time, and try to catch any drips, as that will affect the consistency of your colour.

Do this with a foam or synthetic brush. Do nice even coats, leave it for 15 minutes (or based on your stain's directions) and then wipe it off with a rag.

It is always better to leave it for too short a time, and reapply than to try to remove stain.

Paint your letters

For this, I used the gold milk paint, doing several coats.

Step 6: Etchings

For more complicated etchings I would reapply my template as in Step 1.

Then using your Rotary tool, etch the stained wood away, revealing the clear, white wood underneath. Sand it with the sander attachment.

*Note: In the images, I did a few etchings before I stained the wood. I recommend etching AFTER staining.

Next: Paint in your etchings with the gold paint.

Step 7: Gluing and Weatherproofing!

Varathane!

I applied about 5 coats of EXTERIOR UV protecting Varathane to keep the sign from fading and protect it from water. Be sure to get all the EDGES and backs as well.

UPDATE: I found later that this was not enough, and the sign needed a good 5 more coats to fully protect it from the elements. The more, the better!

Glue and nail!

Next, glue your letters down!

I recommend for the multi-layered lettering that you use a strong glue, and maybe even some finishing nails to hold it all in place.

EDIT: Since this was published, I found the glue I used to be not strong enough. I ended up using a pair of wire cutters to cut about 10mm off the end of a finishing nail at an angle. I then hammered two of these into the base, leaving about 5mm exposed. I then applied glue around it, and pressed the "THE" down onto the nails and glue. Worked like a dream.

I also applied Varathane on all the edges and cracks where the letters attached. Just in case!

And that's it! Hope you make some great pub signs!