There are a number of ways to make your own stencils. I will try and mention a few here but need to do a more detailed explanation. I wrote an article about 5 years ago for the Fons and Porter magazine. I will try and find it and make it available. I want to find my original and not the edited one that appeared in the magazine. And yes, I can send the article without copyright problems as I wrote the article.
To make a really successful stencil, you need a flexible plastic. Most plastic you find in shops are too hard and still to cut the slots for a stencil. Even with a craft knife it is difficult. The best and easiest is to use a flexible plastic such as DBK which is blue plastic. It is sold through shops and on line from The Stencil Co. It cuts easily with the craft knife - such as Xacto or the Olfa knifs. The best knife if you can find them are the double blade Xacto or Olfa. however both have been discontinued but might be available in some craft departments/stores. They cut a double line. The double blace that is still available, that I am aware of is one that the two blades are on the end of a circle type attachment. They are a bit more expensive than the two mentioned above as the blades are not changable.
However, a stencil can be cut with a one blade craft knife but will have to cut the two lines to make the groove.
One quilt teacher does show how to use the harder plastic and use a groove cutter used in woodwork. I don't know if a demo is on line but will search for it. She says the Amish use the method.
Several years ago a student brought in a stencil she had cut out of freezer paper using a one blade knife but again had to be careful in cutting the groove. It made a successful stencil.
An old method is to draw your design on a plastic and then put a large needle in your machine withut thread and stitch over the lines to make small dots. Chalk was then rubbed over leaving the design on the fabric and then filled in with a pencil or other marking piece.
There is a stencil made on a stiff like silk, almost like a silk screen for printing and you use the pounce powder to rub over and leaves a marking on the fabric.
When you are considering the shape or design, look at it and see if you can use a template (shape without the grooves. Many simple designs can be traced just using shapes. If you want specific designs - sports, animals et, then look in the craft store for a painting stencils. Many have the open shapes that can be traced around for your design.
But remember that the stiff plastic used for templates are not easy to cut the grooves.
As to makers. Many many on the market. My recommendation are: Multi-Pastel Chalk pencils which can be found in quilt shops or craft stores. They are made by General Pencil Co. I only use white and light gray and sometime the dark gray. I avoid colored pencils because even tho they will say washable, they are not always so. Some use the colored chalk successfully. I can't. There is another pencil - also made by General Pencil Co which is a black washable graphite that works. Looks dangerous because the lead is larger but does erase and wash out.
One that I have had success with is the ceramic mechanical pencil = under names of Fons and Porter, Collins, Sewline Thin white lead that is strong and marks well and does erase. I recommend to always rub or erase as much of the marks off (with pencil or chalk) to remove as much of the surface marking as possible before washing. I use the lint brush you find in pet stores or other stores. It is a flexible plastic (usually oval in shape and black) Gently brush the marks. This is working good for me when I mark with white on black.
I like to keep the pencil sharp and will mark about 12" and then hit the tip with the pencil sharpener.
Chalk pencils will break so you need to be careful when sharpening. I use the battery sharpener and when sharpening will twist the pencil while sharpening as that appears to make the sharpening more even and more gentler.
If you have a light colored fabric that you are marking then sometimes it is possible to trace the design using a light box. For large pieces I have a 24"x48" piece of plexiglass. I open the dining room table and put the plastic over the opening with light under the table.
These are some thoughts about stencils and marking.
There are times when you need to make your own stencil type product to mark. However, consider your time vs the cost of the stencil. Sometime the cost will be worth it to buy the stencil if it is appropriate and fits.
It is not easy to find a large selection of stencils at shops as they take up a lot of space. Search on line for places that mail order. The Stencil Co and Quilting Creations International are two mail order companies.
You will also occasionally find good selections at the larger shows. There was a booth here in New England this past weekend at the Original Sewing and Quilting Expo that had a good selection. If you are going to Paducah then there should be two or more with stencils. I know there will be one booth downtown and another at The Rotary Club venue.