CNC Machining Service Break-Even Analysis: $52K Monthly Revenue

Fixed costs $43.5K/mo Run-rate base

Contribution margin 79% After variable spend

Break-even revenue $55.1K/mo Monthly target

Break-even timing Month 2 Launch month

Break-even calculator

Test monthly revenue, variable expenses, and fixed shop costs against break-even for a CNC machining service.

Lean Base Full

Monthly revenue Revenue is the top line that covers direct costs and overhead. $ Low sales High sales Variable expenses Direct costs rise with each job, like material, machining labor, and shipping. $ Low direct cost High direct cost

Money available to cover fixed costs $90,000 $103,000 revenue - $13,000 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the shop must cover before profit starts. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which CNC machining expenses are fixed, and which move with sales?

Cost classification

Break-even works only if each expense follows the right driver. Rent and software sit still, but materials, machining labor, commissions, utilities, tooling, and staffing capacity move as jobs and machine hours rise.

Expense	Cost	Break-Even Treatment	Common Mistake
Workshop rent	Fixed	Include $6,000/month from Month 1 through Month 60 in the monthly break-even burden.	Spreading rent per part and forgetting the cash leaves every month even when machines sit idle.
Software subscriptions	Fixed	Include $1,200/month for design, programming, and planning systems as fixed operating overhead.	Treating recurring licenses like a one-time setup item instead of a monthly break-even hurdle.
Raw material	Variable	Apply the part-level material charge, from $4.00 for sheet metal to $20.00 for steel casting, to each unit produced.	Using one blended material rate across all parts and hiding low-margin jobs inside the average.
Direct machining labor	Variable	Use the unit labor charge by part, from $3.00 for brackets to $10.00 for gear housings, when calculating contribution margin.	Calling all shop labor fixed when routing time still changes the margin on each job.
Sales commissions	Variable	Apply the revenue percentage by year, starting at 2.5% in the first year and declining to 1.5% in the fifth year.	Modeling commissions as flat payroll and overstating contribution when sales volume grows.
Utilities	Semi-variable	Start with the $1,800/month base bill, then add the usage allocation tied to production and machine run time.	Treating the full utility bill as fixed during heavy spindle-hour months.
Shop supplies	Semi-variable	Model supplies as a small revenue-linked charge because inserts, fluids, gloves, and consumables rise with job activity.	Labeling supplies as harmless overhead and missing the drag from rework, scrap, and tooling wear.
Machinist and programming capacity	Semi-fixed	Add labor in steps as volume grows, such as skilled machinists rising from 2.0 FTE in the first year to 4.0 FTE later.	Assuming staffing scales smoothly per unit instead of jumping when the shop needs another person or shift coverage.

How does break-even change from a lean CNC ramp to full shop utilization?

Scenario table

Break-even gets easier as revenue rises from lean ramp to full volume, but the real driver is part mix across shafts, brackets, valve bodies, gear housings, and fixture plates. Machine hours aren't provided, so routing data has to set true utilization.

Planning assumptions only; actual break-even depends on routing, scrap, and machine-hour data.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean year 1 ramp	$1.03M	$170k	$435k	83.5%	$427k	Cushion is tight; a mix slip can erase it.
Base year 3 rhythm	$2.20M	$352k	$668k	84.0%	$1.18M	Healthy cushion if routing and uptime hold.
Full year 5 load	$2.97M	$455k	$668k	84.7%	$1.85M	Strong cushion, but only with the right part mix.

What pressures the CNC machining break-even plan?

Stress test

The base plan clears break-even by a wide margin, but the cushion shrinks fast if revenue falls, fixed costs rise, or margin slips. Downtime, rework, rush overtime, underpriced material, and late approvals are the main stress points.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	Year 1 base case holds.	$521k	$511k cushion	Healthy cushion, but steady output still matters.
Revenue shortfall	Monthly revenue falls 20%.	$521k	$304k cushion	Less sales headroom makes delays and idle time matter more.
Fixed-cost pressure	Fixed costs rise 15%.	$599k	$433k cushion	Higher shop load pushes the business closer to break-even.
Margin pressure	Contribution margin drops 5 points.	$554k	$478k cushion	Small price or cost slips reduce room for error fast.
Combined pressure	Revenue falls 20%, fixed costs rise 15%, and margin drops 5 points.	$637k	$188k cushion	One bad quarter of downtime, rework, or late approvals can wipe out profit.

Can you prove this CNC shop clears break-even before you sign the lease and buy the machines?

Founder checklist

If you're about to sign the lease and buy the machines, test the quote pipeline first. This shop only makes sense if demand, margin, and cash can carry the break-even load before the first big spend.

1Demand Pipeline$521K/mo

Do not commit until booked quotes can reach at least $521K a month, and spread across all five part families, so one customer change does not sink the month.

2Fixed Load$43.5K/mo

Check that workshop rent, utilities, insurance, software, and Year 1 payroll really stay near this monthly load, because fixed cost sets the break-even floor.

3Quote Margin85.5% CM

Verify each quote still leaves about 85.5% contribution margin after metal, labor, finishing, inserts, packaging, commissions, and shipping, or break-even moves up fast.

4Shop FTE6.0 FTE

Make sure the Year 1 workload fits 6.0 FTE and still leaves room for quality inspection and scrap control, because rushed staffing drives rework.

5Cash Cushion$1.62M

Hold enough cash for the $625K buildout plus the $994K Month 2 low point, because this plan needs a deep cushion before volume settles.

6Launch BacklogMonth 1

Lock in opening-month work before you buy the machines, because fixed costs start on day one and empty capacity hurts the most.