CNC Router Shop Break-Even Analysis: About $88K Monthly Revenue

Fixed costs $45.9K/mo Payroll + overhead

Contribution margin 57% After variable costs

Break-even revenue $80.5K/mo Monthly target

Break-even timing Month 14 Model ramp point

Break-even calculator

Test monthly revenue against variable expenses and fixed costs to see when this CNC router machining service breaks even.

Lean Base Full

Monthly revenue Revenue sets the pool available to cover direct costs and overhead. $ Low sales High sales Variable expenses Direct costs here scale with the work you sell, like materials and labor tied to output. $ Lean costs Heavy costs

Money available to cover fixed costs $176,116 $301,333 revenue - $125,217 variable expenses

Margin ratio

58%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly overhead costs that stay on even if sales slow. $ Light overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Your break-even call is only as good as the cost buckets behind it. Keep rent and software fixed, materials variable, and labor, tooling, maintenance, and machine usage visible so Month 14 break-even is not overstated.

Expense	Cost	Break-Even Treatment	Common Mistake
Manufacturing Facility Rent, $12,500 per month	Fixed	Include the full monthly rent before counting unit margin toward break-even.	Spreading rent per unit and hiding the real monthly hurdle.
CAD and computer-aided manufacturing (CAM) software, $1,200 per month	Fixed	Treat as a recurring monthly operating charge from Month 1 through Month 60.	Dropping software below the line as if it were optional.
Salaried management, programming, sales, and operations team	Semi-fixed	Model salary steps as headcount rises, including Senior CAM Programmer and Operations Coordinator additions.	Assuming payroll rises smoothly with sales instead of in hiring jumps.
Panel, lumber, acrylic, plywood, and composite sheet stock	Variable	Charge material per unit, from $8 acrylic sheet stock to $90 specialty composite sheet.	Using one blended material rate and missing waste by product mix.
Direct CNC Operator Labor, $4 to $35 per unit	Variable	Tie operator labor to units produced because each product carries a separate per-unit labor load.	Treating shop-floor labor as fixed and overstating contribution margin.
Consumable Tooling Bits, 1.2% to 1.5% of revenue	Semi-variable	Track tool wear against revenue and production mix, then update rates as routing complexity changes.	Leaving bit wear inside general shop supplies.
Equipment Maintenance Fund, 1.0% of revenue	Semi-variable	Accrue maintenance with sales volume so machine use funds repairs before downtime hits output.	Booking maintenance only when repairs happen.
Machine Power Consumption and Waste Disposal Fees	Semi-variable	Model power at 1.0% to 1.2% of revenue and disposal at 0.4% to 0.5%.	Ignoring the usage-linked load from run time, scrap, and offcuts.

How does break-even shift across lean, base, and full CNC routing mixes?

Scenario table

Break-even moves with mix because some jobs eat far more machine time and labor than others. Signage blanks at $45 are light, while display fixtures at $600 are heavier, so the same shop can move from loss to cushion fast.

Planning cases only; actual results will move with product mix, utilization, and job timing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Year 1 lean launch mix	$71.8K	$30.7K	$50.4K	57.2%	-$9.3K	Still below break-even; small mix shifts matter.
Break-even base mix	$88.1K	$37.7K	$50.4K	57.2%	$0	Covers fixed overhead with no cushion.
Year 2 higher-volume mix	$147.1K	$60.7K	$50.4K	58.7%	$36.0K	Clear cushion above break-even, even with heavier fixture work.

What breaks break-even for a CNC router machining shop?

Stress test

This model is tight. A 10% sales miss, a 5-point margin squeeze, or a 10% overhead jump each push break-even close to, or above, plan; combined pressure leaves the shop about $141K underwater.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change from the base case.	$881K	$20K gap	Only a thin cushion remains.
Revenue shortfall	Revenue is 10% lower at about $792K.	$881K	$89K gap	Idle router time and slow quotes hurt fast.
Fixed-cost pressure	Overhead rises 10% to about $554K.	$968K	$107K gap	Rent, software, and compliance push break-even up.
Margin pressure	Contribution margin falls 5 points to 52.2%.	$966K	$105K gap	Rework, overtime, and tool wear squeeze spread.
Combined pressure	Revenue falls 10%, margin drops 5 points, and overhead rises 10%.	$1.06M	$269K gap	At $792K revenue, the shop is about $141K underwater.

What should you verify before signing the lease and buying the CNC setup?

Founder checklist

Don’t lock in the lease, machine spend, or headcount until the quote pipeline can support the model’s $88K monthly break-even revenue. Year 1 revenue is $861K, break-even lands in Month 14, and the cash low point hits in Month 13.

1Quote Pipeline$88K/mo

Verify booked and near-booked work can cover the monthly break-even target before the $12,500 rent starts.

2Unit Margin$15-$162/unit

Check that each product price clears its direct cost, from signage blanks at $15 to display fixtures at $162, so routing still leaves room for selling spend and overhead.

3Fixed Load$45.9K/mo

The fixed burn is about $45.9K a month: $29.2K of salaried payroll plus $16.7K of overhead, so don’t sign a lease unless demand is already visible.

4Line Setup$312.5K

Check electrical capacity, dust collection, compressor needs, racking, and forklift flow before committing the $312.5K equipment list, and track setup time separately from billable routing so hidden downtime does not eat margin.

5Staff RampYear 3 ramp

Keep staffing at the Year 1-2 level until utilization supports the planned jump to 2 FTE in senior CAM and operations in Year 3 and 2 FTE in sales in Year 4.

6Cash Buffer$869K

Hold reserve cash for the Month 13 low point, because the model’s minimum cash is $869K and break-even does not arrive until Month 14.