What medium should I use to make an initial design on paper for paper cutting?
A use two different methods to accomplish this:


I will create a template piece out of a stiff piece of paper. This paper has my design drawn on it with pencil or whatever.


Then I cut out the design on that paper. 
Once done, you lay the template over your final paper, and secure it with some type of clips. You want to make sure the template doesn't slip around. 
Then, you cut out the design just as you would use a pencil with a stencil. 
There's no need to create the entire design in your template piece. You can create small pieces, just as you would use a French curve, eraser shield, or stencil.

I simply draw the design in reverse on the back of the paper you're using, if it's meant to be viewed only from one side. Use a light pencil and make your cuts. The final product will not have the lines visible, as they're on the back.


Erasing marks afterwards has not been successful for me. It often leads to tearing of the paper, without erasing much.