I've seen a few different ways to make circles for applique and have tried a few of them without satisfaction. Then I watched a clip on YouTube...and was sold.
Roughly cut your fabric the size you would like your finished circle to be.
Normally I would cut the fabric in squares but in this case, I'd cut the centers out of the background fabric I was using for Dresden plates.
Draw a circle on the wrong side of fabric, the size you want your finished circle to be.
I use a non adhesive interfacing and pin it onto the right side of fabric.
Sew on the drawn line.
I use pinking shears to trim around the sewn line (no need to cut notches).
Cut a hole into the interfacing, (careful not to cut through the fabric) in order to turn it right side out.
Use a sharp(er) tool (I usually use a plastic chop stick) to push out the edges. I found it easier if I pushed on the fabric side, rather than on the interfacing side.
Looks pretty good.
Turn it over and press.
I've made a variety of smaller circles and this method works so easy!