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

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

Step 2: Apply Clear Plastic Sheeting

Here I have already laid out the hand cut vinyls on the clear contact sheet
The decal is in the early stages of creation and the 1st 3 letters are getting ready to be put onto vinyl backing

Step 3: Cut Vinyl Decal to Size

Here is the complete hand lettered stencil after removing the letters actual backing, placing it backwards onto contact paper and arranging the letters onto a vinyl backing.

I made this at TechShop SF http:/TechShop.ws

Step 4: Example of a Poor Location for Vinyl Decal Application

When selecting a place to apply the decal make sure that it will stick well I use a sample piece of vinyl to test locations for adhesion. This location attempting to apply a vinyl SFlettering decal to the outside of an easel did not stick.

Step 5: Choose Application Surface

When selecting a surface for applying the final vinyl decal make sure that your surface is free from oil and grease and other particles that may influence if your decal stays where you out it. Be aware that it is almost impossible to place a vinyl decal in some surfaces.

To promote adhesion to concrete and brick there are specific types of vinyl available - some vinyl that can stick to brick and concrete is available from http://www.dezignwithaz.com/

Step 6: Apply Vinyl Decal

More than half of the surfaces that you work with will require you to put a consistent and adequate amount of pressure to secure the vinyl to the surface using a squeegee. If you attempt to do this without a squeegee make sure that you have at least a hard plastic gift card or a credit card to promote long term adhesion.