Great breakdown. I believe the key is the price of the fabric. A person can not make a profit on any fabric item if they go to a LQS and pay off-the-shelf price. If you buy in a store, you need to shop wisely. Also, the idea of quilting a larger piece, cutting it into sections and binding is great (I will definitely use it!), but, for a newbie the birthing method might be quicker. Another trick when using binding is to use a decorative stitch. This way if you are in a hurry, you can be a bit off with your stitches and no one will be the wiser. Take an afternoon without interruptions, lay out all your supplies and then time yourself thru the whole process of making 2 mug rugs. This is your starting point. Of course you will speed up as you go, but it is a base to work from. To give yourself a break from the mug rugs, after making a few sets, make a set of 4 placemats. This will give a variety to your inventory and keep you fresh. I would not use solid fabric, but perhaps small prints that read solid. I would also make the holiday sets and a few 'regular' sets. You will find that if you have all your supplies ready, you will spend a whole day making them, building an inventory and feeling excited about it. There is nothing better than at the end of the day looking at a table top with all the finished product on it and knowing you did that! And take pictures with notes on fabric, time involved, things not to do the next time, etc. If you treat it as a business, it will work as a business. If for some reason the don't sell at that shop, you will have your christmas and hostess gifts already made or a head start on selling on etsy. But, do keep it fun. Good luck.