While the top is nice and flat - before the braces are glued - is a good time to do the soundhole rosette. I’m making my guitar in the spirit of a pre-war Martin Triple-0, so I’m using herringbone purfling (decorative strips of wooden marquetry inlay) for the body and the soundhole.

A circle-cutter is used to cut the channel for the decoration. Firstly a small reinforcing plate is glued onto the centrepoint and a 1/4” hole drilled for the circle-cutter’s locating pin. The circles are cut with a scalpel blade that is adjusted to the required          
Next, material is gently removed from the channel using a ‘Witch’s Tooth’ router plane.  Not bad eh?
Part 6 - Soundhole Decoration
Before gluing, the edges of the channel are treated with a coat of shellac lacquer. This seals the channel and prevents any colour bleed from the decoration into the surrounding wood.
Making An Acoustic Guitar - Page 7