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Now we get to the fun part! Planning is one of the most important steps that, especially as a beginner, you should not overlook. It's a lot more than simply drawing an outline, too. The first thing you need to do when planning a new project is make sure you have everything you think you'll need. Nothing is more frustrating than to get pumped up for a new project, get started, realize you don't have all the materials, make a run to the hardware store, and find that it is closed or they don't have what you are looking for! It sucks! I can't stress enough that you have to be prepared and have everything organized in a logical manner.
So, now you have to consider a few things. First and most obviously, consider the knife you will be making the sheath for. Then consider how you will be using the sheath. While the principles were the same, the sheath I made for a 4" OAL patch knife with 1/8" thickness was a lot different in design than one I made for a 20" long, 1/2" thick khukuri! How do you intend to carry the knife? Will you want to switch sides ever, or angle the carry, or carry it in a totally different way down the road? Will you want to take the belt loops off and lash it to equipment? Will you ever be carrying it in a way that the knife could fall out? Is it a concealment rig or for plain view? Do you need drain holes? Do you want out-the-hole-in-the-top draw or something fancier? The list goes on and on.
In short, in your planning stage you must consider what you will be carrying and how. You need to think about where you will be using the knife and if you need multicarry options. You also need to consider draw and retention, as well as how you want the sheath itself to look inside all these parameters. This is where you can really get creative, and to be quite honest, your first sheaths will be decidedly plain as it's tough to realize what Kydex can do until you experiment. You quickly find out how the knife is retained and, therefore, where you can remove unnecessary material, etc. If nothing more, though, come up with a drawing of the way the sheath will look and where you intend to put hardware. You must have some kind of blueprint to guide you, especially when first starting out.
There are two basic styles of sheaths upon which other types build from. The first is the fold-over type, which uses one piece of material and is folded over the spine of the knife. This is your typical "pouch sheath" like you find on hunting knives. It has hardware on one side only of the knife. I like this style of sheath because it is a little easier to make, is very clean-looking, and tends to be smaller in area, which is good for concealment sheaths, neck knives, etc. Also, it has the look of a traditional knife sheath, so it is less "tactical" and a little less threatening to non-knife folk when publicly displayed.
The second basic type of sheath is the pancake sheath. It is made from two pieces and has hardware on both the spine and edge sides of the knife. A lot of people like this sheath better for its "tactical" look, and it can be a little more versatile than the foldover. It is also the sheath of choice for people who are wanting to experiment with alternate draws, such as the khukuri sheaths being developed by Edge Works.