Sign painters , like people who do calligraphy now, practiced painting various fonts, often working from manuals. Like most any trade, they often would also learn by first working for an experienced tradesman who needed help with his work. There would be a layout process- a pair of calipers/dividers to mark off the number of spaces for each letter- not necessarily one space per letter ( you might notice that some letters are closer together in words than others. like a dozen L' s ( llllllllllll) is going to be shorter than a dozen a's ( aaaaaaaaaaa). If you look at 19th c. early 20th c. photos, you will see that it was not uncommon for a business to paint their name over the entire side of a building. In that case, the letters would usually be first written out on paper, and then that paper referred to in order to scale up the sign- so, for example, a 25-inch wide row of letters on paper could be scaled up to 25 feet, on the side of a building.

Old manuals for sign painters are around- you can browse one here, from 1878, the Art of Lettering and Sign Painter's Manual . You'll notice that most of the fonts it has are , well, in fashion for 1878. Unlike your computer, a sign painter would not necessarily have many, many fonts. Because each would require some practice, in order to be done well and in a profitable amount of time, the popular ones were the ones to first parade before the customer. Interestingly here, there's a section on German Fraktur script. There was a significant German population in the US in 1878, and so it was a useful thing for a sign painter to know.

There were lots of other things to know besides lettering. Sign painters would learn how to shade letters, and do borders of different colors, and to do gilding, especially on glass. Gilding on glass, also called water gilding, was a tricky business- and is still. Handling loose gold leaf and making it do what you want is a real skill, and unlike almost anything else. Here's an example- when it's done well it looks effortless.( It's not that when you're first trying to do it.)

At least one exception for the usual layout of the letters on the side of a building that's worth mentioning is the Mail Pouch Tobacco sign painter Harley Warrick. He painted the same sign, over and over and over, and did it for so long that he needed no layout, beginning with a couple of key letters to help him center the text, and then filling in the rest. He's quoted here as saying "the first 1,000 were a little rough, after that you got the hang out it".