cut your circle, and cut a circle out of your background fabric slightly smaller than your circle, lay the background fabric on your workingspace right side of fabric down and your circle on top of the hole right side down as well, now pin the inside of the hole ( so rightsides of fabric facing) to the outside of your circle and sew.
I hope this makes sense, if not i have seen a tutorial somewhere online, will try to find the link and post it.