I have made tons of targets over the years, not for profit, but for friends and clubs. As far as the steel, 3/8" is fine, used some 1/2" but it wasn't necessary. I used to use the AR (400,500) plate, but it got so expensive, $1600 a 4X8 sheet that I went to the cheap mild steel (A-36) about $250 a sheet, its been a year or so since I bought any, so it probably cost more now. I have many steel targets in my pistol pit in my back yard, they have taken thousands of hits without any damage at all.
I changed all my reactive stuff to just bolt down. You can see the hits each shot, after five or six hits, just take a can of white spray paint and re-paint, just like you do at any Steel Challenge match.
My favorite targets are the bowling pins. Cut the steel out the same dimension as the pin and bolt them to a horizontal 4X4. Shoot like the old pin matches (Second Chance), but you don't have to bend over and reset the pins. For bolting them down, use a 3X3 angle iron 4" long, (or whatever you have laying around), weld the target to the angle in whatever position makes it easy to bolt down.