If you sew a nine patch using 5" squares your nine patch will measure 14" unfinished. So if you measure in 6 1/2 inches and cut from all edges you will have a little excess in the center to throw away. But you will have a block of 12 1/2 inches unfinished when you sew four of them together.
(Actually I would put my ruler to cut on the seam line of the nine patch so I would be putting my ruler so I cut 2" past the seam line (that would be the seam along the center block). That way all those small blocks are exactly the same size.) To make sure you are in the same area or understand what I am saying. Turn the block upside down and measure in 6 1/2 inches in and mark it with a pencil. Now measure from the seam 2" and you will see they are the same thing. Only if there are irregularities when you sew your nine patch, lining up your ruler on the seam is more accurate.
I saw a question on the board why the little blocks didn't line up in someone's patchwork, the above suggestion will illiminate that.
The fiinished size (after the block is sewn in quilt top) of the big patch will be 4 1/2" and the small strip and small block will be 1 1/2. That totals to a finished 6" block or a finished 12" block of four put together or a 12 1/2 unfinished block of the four put together.
Certainly you can cut down the blocks before, but why