I originally put this in the homebrew section, but it was suggested to me that this is a better home for it.
So my weekly group met last night and I brought a new little craft I made to help with the fact, that while I'm the DM, I really don't have many miniatures. So I took a piece of 1/2" plywood, I was originally going to go with 1/4" but decided that it might be a bit too flimsy during transit, then cut it into squares matching this diagram.
I then sanded the surface, gave it a primer coat of white paint and then used Rust-Oleum 241140 Dry Erase Brush-On Kit to give it a nice customizable finish.
Out of a 24"x10" scrap of plywood I had laying about in my garage, I was able to cut out a total of: 8 large sized templates, 8 huge sized templates, 4 gargantuan sized, and 2 colossal sized squares.
After trying it out tonight at the game, in which they actually worked pretty well, allowing for combat situations to be set up fairly quickly, and since all my players seemed to think they were a good idea, I figured you'd like to see them as well.
Try using MageKnight figs. They are based on a 1.5" base, however you can typically find them on ebay for about .50 cent each which is alot more affordable than D&D / Pathfinder / Bones miniatures.
Currently my set has about 250 figs and I've only spent about $80. No the quality isn't the best, but I prefer them to using Pawns (which are certainly not a bad option).
Nice, OP! I have some plastic squares that you can use dry erase on to some effect, but this is a great idea and would work better. If you're lucky, you can also find woodcraft squares already in the right size (although frustratingly they often come in sizes that aren't QUITE right, like 2.25" rather than 2", etc., so I also see the appeal of doing custom cut if you already have the tools to do it.)