I've done a few felted bags. The general rule is 40% shrinkage, I believe. The first bag I did was presented two ways, knitted in the round, or knitted from the top of one side, decreased to the bottom, then continued up the other side and increased. This way there was no bottom seam but two side seams. As it was a beginner class, we did the top to top pattern.
I currently have yarn to do a small pouch purse for a friend. As I don't have a pattern, I'll have to wing it, unless someone out there has one. This would have a long shoulder strap to about the hip, and a small, possible 4" square bag for holding some bills, a license and a lipstick.

Lots of felted patttern to browse through below. Otherwise, its fun to wing it and you can stop the felting process when you get to the size you want. A great book for felting projects is Bev Galeskas' "Felted Knits".

Here is a link that might be useful: Felted patterns

Many thanks for your help.I'm excited about trying this.

Swatch, measure, felt, measure. Compare differences.

Different yarns/fibres will shrink differently.

~ Kit