I cant figure out how to cut the background and then spacing the words (I do have similar small letter cutter).  I'm adding the following on an 16" board which will have a 10" cake.

The words "Happy Retirement Michael"

http://i121.photobucket.com/albums/o226/mmhassa2/vibrant%20building%20cut%20outs_zps5uryo5qq.png

When I space my words, I just count all the letters (including the spaces in between the words) and find the middle.  I add the middle letter first and continue to one side then the other.  Looks like you can just put your letters on a piece of fondant and attach it to the cake board.  You could do that ahead of time so it dries a little or pop it in the fridge for 5 minutes so it's stiff and it won't stretch when you move it.