Handlettering means starting from sketching and slowly perfecting that lettering into a digital type (through Illustrator) focusing on which areas to perfect, and which areas to keep it's imperfections. 
The following is an example of my process of handlettering, for a revised version of "Record Store Day" (for my own entertainment), along with other finished handlettered designs. All finalized vector products are built 100% by hand using only the pen tool and a close eye to perfect curves. 
Adobe capture SVG of drawing. 
Tracing with the pen tool over the SVG Adobe Capture. 
Guiding out the AI file for correct / equal heights of the letters.
Final even weight pen tool tracing. 
Variable widths added to the line work. 
Vector printed, drawn in ornamentation, then brought back into AI via Adobe Capture.
Ornamentation vectorized and widths added. 
Sometimes after taking a couple days off of looking at your work and consulting with other designers, you find that things were better before you started adding more. Reverted back to lettering without the width variants, and ornamentation change to more of a spinning vinyl graphic. Stock background used. 
Stock background replaced with handmade background in Photoshop. 
20"x30" poster designed as a gift for family members in honor of my late Grandmother (last name Ninow). All ornamentation and large lettering designed by hand. 
A fake idea for a bar in LA that has a modern vibe, yet leaves you a bit spacey....
What started as a hope that the band The Murrays would play for a wedding reception, ended up as a baseball inspired handlettered screen to be showcased behind the band. (colors provided by the married couple). 
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