Your question is a good one. I'm sure Frank's Frets.com site probably addresses this, although I don't remember an article on starting from scratch with a piece of bone. He has some excellent info on slotting nuts, adjusting string height and such. I'd say it is required reading for any serious luthier. Getting a bone blank would be the logical place to start. You want something that has been prepared by boiling or whatever they do to it. I think they often use cow bone but I've purchased some blanks that were camel bone or buffalo or whatever the Asian folks have. You could start with a piece of bone and boil it but I think you'd be better off to get a prepared blank. I used to get some pieces of sterilized bone from the Walmart called "redi bone". They were sold for dogs to chew on but I've not seen any of those in a long time. They started out as about a 4 inch long section of bone from a cow's leg. You can saw several nuts and saddles from each one and the price used to be only about $2.00 or $3.00 each. I found some on the web a while back. They make excellent nuts and saddles but you need a band saw and some good grinders to use them. The blanks sold by Stew Mac and such places are good but I've found them to be a little expensive for my taste. I've lately gotten some blanks from Ebay from a guy in Asia some where. His products are probably water buffalo bone and are good for our purposes. Preparing a nut blank into a nut is a process that takes some experience to do properly. A Martin is probably one of the harder nuts because some models have a wierd angle underneath. Some of the tools that Frank describes are a real help. The proportional dividers are really handy for spacing. He also tells how to make a graduated spacing guide for those who aren't satisfied with the accuracy of these dividers. His tips on using the mailing labels for a shim underneath a nut is a real good tip. The parrot vise looks like it is well suited for holding the work. I have a home-made vise that I adapted for holding nuts. A good file and some various grades of sandpaper are necessary. The nut slotting files are also needed to get the slots right. A thickness sander is real handy for getting the thickness of a saddle right. You also may need something to remove the dust created by sanding this bone. It has a pretty awful smell and I feel sure it is not good to breathe. I can tell you that studying Frets.com has been a real help in my nut and saddle making ( and everything else). In the last years I've tried to make my nuts and saddles look like a work of art instead of just something to hold the strings. To me, there is nothing that is as pretty on a stringed instrument as a piece of bone that has been highly polished. You just can't get that look from anything else. Read Frank's stuff and practice.
Fork in the road stuff here - if you are a dedicated enthusiast about all things guitar and organic and have lotsa time available and aren't in business - firstly, shoot a cow, skin and gut it (OK if you are a redneck hockey-dog from Alaska) clean the bones, boil them and then throw them on the shed roof to bleach out a bit and so on and so forth. If you factor in such things as the fuel for the truck, ammunition, and the energy to boil the pot and run the saw along with your labour cost etc you may wish to consider plan B.
Plan B: buy a half dozen blanks from Stewmac which supply good consistent quality, sized bone for most nut/saddle combinations and practice on them. Stewmac also have plenty of tools and tips for making nuts (the graduated nut slot ruler is among one of the more useful tools for making a quality product and a set of nut files are essential).
The bottom line is that Stewmac consistently provides top quality stuff that works - in this case the real cost of home producing bone stock and bandsawing, filing and grinding 2nd grade material does not appear to be a cost effective way of learning about and producing high quality nuts and saddles. Rusty.
I have wrestled with the cost/time of buying versus making my own blanks.If you just need one or two I would buy blanks unless you just enjoy doing things yourself. I fit into that category. I previously worked for a builder who bought 200 nut blanks at a time from several well known top suppliers. While most were very good, we would see 10 or so per 100 that were so pitted we wouldn't to use them. I don't require near that many and find some great prebleached bone at a local pet supply store. I pick through the bones to get the densest, heaviest ones I can find.I have compaired the blanks made from them with bought camel, cow, pearl and ivory. I haven't seen or heard any difference.I only work on acoustic instruments, don't know if there is a difference on electrics. I guess these pet stores buy from different suppliers so what is available at which store could vary alot. If they have 20-30 pieces I might only find 3 or 4 that will work. I generally get 5-6 nut/saddle blanks per $1.95 bone. I do spend a good amount of time shaping and buffing out,and time is money, but I get the piece I pick rather than the piece someone grabs out of a bin to fill an order. Just works for me. Also I highly recommend a good dust collection vent very close to saw and sander. But it is possible to make a highquality blank if you look around. David
i think the reason why i'm interested making my own is just to get it out of my system, and say "yeah, i've done that."
i'm a weekend luthier (to describe myself very generously), and i find that the process is as enjoyable as the product itself. so if this turns out to be a pain, at least i know firsthand. but if i end up liking the process, then the cows better watch out. bessy, don't go in my basement ;)
incidently i saw a huge femur of a camel bone up for auction in ebay. hmmm...