Find out what kind of dance you'll be costuming for. Write down all the details: how many people, what style of dance, where it will take place.
Sketch some ideas. Even if you're not an artist, basic sketches will help jog your creativity. If your sketches don't satisfy you, add notes.
Speak to the choreographer. Find out the mood of the dance and the emotion she wants to convey. Her input may help you choose colors and fabric.
Once you have an idea, look around for pre-existing costumes that fit your description. If you've decided on a leotard for the base, it will be easier to buy one and alter it than to make it.
Take the measurements of your dancer. This will help you determine how much fabric to buy. Or, once you've designed the costume, you can give your description and measurements to a company to make it for you.
Use a leotard as a base. You can achieve many different effects with additions to a single leotard.
Measure out a length of fabric according to the measurements of the dancer's waist or hips, depending on where you want the skirt to sit. Your fabric should be more in the shape of a trapezoid than a rectangle, with the shorter side as the top.
Flip the trapezoid of fabric upside down so the top part is at the waist or hips and the bottom is up near the shoulders and neckline. This is so the seam will not show. Sew the fabric to the leotard, along the top part of the trapezoid only.
Sew the sides shut. Be sure to do this while the skirt is still upside down, so the seams will be only on the inside.
Sew ribbon or sequins along the neckline, or in a design on the leotard itself. Dance costumes should be eye-catching, but not so gaudy that they outshine the dancer.
For male dancers, try pairing loose pants with a vest or tank-top shirt.