Choose a letter size appropriate to the sign you will be placing it on. For example, letters on a sign that people can walk up to will not need to be as large as letters on a sign people will drive by in their cars.
Choose a style that fits the design of the sign. Choose an elegant font for upscale events or a fun, rounded font for a children's function.
Choose a letter style that is easy to read very quickly. You do not want to select a font where letters are unrecognizable or mistaken for other letters at first glance.
Choose a color that is easy to read against the background of the sign. Generally, dark signs should have light lettering and light signs should have dark lettering.
Choose a material for your lettering appropriate to the material of the sign. Possible options are paint, decals, fabric, vinyl and iron-on transfers. If you're making a sign on your home computer, consider the weight of the paper you will print on. For a flyer to be posted on a bulletin board, regular printer paper should suffice. But for outdoor applications, a weightier cardstock might be in order.