Startup Planning Guide

How to Start a CNC Shop: 6 Steps From Budget to First Chip

This guide is for engineers and buyers who are weighing a job shop of their own. We walk through the order of decisions: what to buy first, what to rent or outsource, and which costs scale with revenue. By the end you can judge whether a used 3-axis VMC or a new 5-axis cell fits your target work.

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3 machine tiersBreak-even mathTooling & metrologyFirst 90 days

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Key takeaways

Start with the work, not the machineA shop that chases a machine spec usually buys capacity it cannot fill for a year.

Used 3-axis is the cheapest entryIt gets you to first revenue, but you inherit worn ball screws and outdated controls.

Tooling and metrology eat cashPlan on 10–15% of machine spend for holders, cutters, vises, and a CMM or height gauge.

Power and air are fixed costsA 15 kW spindle plus compressor and chiller needs a service drop, not a household panel.

Break-even comes from spindle hoursEstimate billable hours per week before you sign a lease on floor space.

Step 0

Decide the Work Before You Price the Iron

Every shop we have seen fail bought a machine first and found customers second. Flip that. Write down the parts you can already sell: material, envelope, tolerance, and lot size. A bracket at 200 × 150 × 40 mm in 6061-T6 with ±0.05 mm on hole centers is a 3-axis job. A hydraulic manifold with cross-drilled ports at ±0.01 mm is not.

That single page tells you the machine class. It also tells you what you can decline. Shops that take every RFQ end up with a floor full of half-finished fixtures and no repeat work.

If you cannot name three buyers who will send you a drawing in the first month, the machine choice is premature. Spend the next month quoting. The numbers you get back are worth more than any advice column.

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Write a one-page work profileMaterial, envelope, tightest tolerance, typical lot size.
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Name three real buyersNot a market segment. Actual people who send drawings.
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Decide what you will refuseHard turning, EDM work, or parts over your travel.

Step 1

Pick a Machine Tier That Matches Your Parts

Three tiers cover most startups. Tier one is a used 3-axis vertical machining center with a 500 × 400 × 450 mm envelope, plus a used 2-axis lathe. This handles prismatic parts and simple turned work. You will fight thermal drift and pay for spindle repairs, but the entry cost is the lowest of the three.

Tier two adds a 4-axis mill or a mill-turn center. A Ø400 mm rotary table lets you cut four faces in one setup, which matters when the part has features on all sides. Setup time drops, and so does the scrap rate from re-fixturing error.

Tier three is a simultaneous 5-axis cell. It suits impellers, medical housings, and anything with compound angles or deep cavities. The price jump is steep, and so is the learning curve. If your work fits tier one, staying there is not a compromise. It is a cost decision.

Buy the smallest machine that holds your tightest tolerance with margin. A machine rated at ±0.005 mm holds ±0.005 mm on a good day, not on a hot afternoon with a dull cutter.

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Tier 1: used 3-axis + 2-axis latheBest for brackets, plates, shafts, and low-volume work.
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Tier 2: add 4-axis or mill-turnCuts setups on multi-face parts.
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Tier 3: simultaneous 5-axisOnly when the geometry demands it.

Step 2

Add Tooling, Workholding, and Metrology

The machine is the headline cost, but the accessories decide whether you can ship a part. Budget a basic tool crib: ER collet holders, shell mill arbors, a face mill, end mills in the sizes your parts use, and a boring head. Add two or three vises, a set of soft jaws, and a sine plate for angled work.

Metrology is not optional. A 0–150 mm micrometer, a 0–200 mm caliper, and a granite surface plate with a height gauge will get you started. If your customer asks for first article inspection reports, you need a coordinate measuring machine or a reliable third-party inspection partner.

Consumables are a monthly number, not a one-time buy. Carbide end mills, inserts, coolant, and way oil all recur. Track them per job from day one. If a job cannot cover its tooling, the price is wrong, not the machine.

Workholding is where new shops underinvest. A part that moves in the vise shows up as a taper or a chatter mark. Soft jaws machined to the part profile cost an hour and save a batch.

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Tool cribHolders, face mill, end mills, boring head, drills, taps.
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WorkholdingTwo vises, soft jaws, clamps, angle plate, sine plate.
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MetrologyMicrometer, caliper, surface plate, height gauge, gauge blocks.
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ConsumablesInserts, coolant, way oil, air filters, gloves.

Step 3

Floor Space, Power, and Air

A 3-axis VMC needs roughly 3 × 2.5 m of floor for the machine, the control, and the operator. Add a chip bin, a bench, and a path for a pallet jack. A 5-axis cell plus a CMM and a deburring bench takes two to three times that. Rent the smallest space that lets you move a pallet without turning sideways.

Power is a hard gate. A 15 kW spindle on a 3-axis machine pulls around 30–40 kVA at full load with the chiller and compressor running. Confirm the service drop with the landlord before you sign. Upgrading a panel can cost more than the machine itself.

Air quality matters more than air volume. Moisture in the lines causes rust on ways and finish defects on aluminum. A refrigerated dryer and a coalescing filter are cheap insurance.

Temperature stability affects tolerance. A shop that swings 10 °C between morning and afternoon will chase dimensions all day. If your parts are tight, budget for climate control or schedule the tight work in the cool hours.

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Space3 × 2.5 m per 3-axis VMC, plus aisles and bench.
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PowerConfirm 30–40 kVA service before signing a lease.
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AirRefrigerated dryer plus coalescing filter.
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ClimateStable room temperature protects tight tolerances.

Execution

Step by Step: From Empty Bay to First Shipped Part

Follow this order. Skipping a step usually costs more later than it saves now.

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1. Survey the space and servicesMeasure the door width, ceiling height, and floor load. Confirm the power service and compressed air supply. Check whether the landlord allows coolant disposal and chip hauling.
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2. Buy the machine and verify it under powerRun a test cut on a known part before you pay. Check backlash with a dial indicator, listen to the spindle at 8,000 rpm, and inspect the way covers for chips. Ask for the maintenance log.
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3. Rig, level, and commissionUse a rigging company with machine-moving insurance. Level the machine to 0.02 mm/m, then let it sit 24 hours before final leveling. Connect power, air, and coolant.
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4. Build the tool library and prove the processLoad tools, set offsets, and cut a test part to the tightest tolerance on the drawing. Record speeds and feeds that worked. This becomes your setup sheet.
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5. Run first article inspectionMeasure every dimension on the drawing, not just the tight ones. Document the results. If a feature is out, fix the process before running the batch.
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6. Ship, invoice, and log the actual hoursCompare actual spindle time and tool cost against your quote. Adjust the next quote with the real numbers. Most new shops underprice the first ten jobs.

Cost tiers

Three Startup Tiers and What They Buy

Figures are planning ranges, not quotes. Actual cost depends on machine condition, region, and accessories.

Item	Tier 1: used 3-axis	Tier 2: add 4-axis	Tier 3: 5-axis cell
Machine envelope	500 × 400 × 450 mm	600 × 600 × 600 mm	750 × 1,150 × 550 mm
Typical part fit	Brackets, plates, shafts	Multi-face housings	Impellers, medical parts
Tooling and workholding	Basic crib, 2 vises	Add rotary table, soft jaws	Add tombstones, probing
Metrology	Hand tools	Hand tools plus height gauge	CMM required
Power service	30–40 kVA	40–60 kVA	60 kVA and up
Learning curve	Weeks	Months	Six months or more
Best for	First revenue	Growing order book	Complex geometry contracts

The Verdict

Buy for the work you can already sell, not the work you hope to win. A used 3-axis machine, a solid tool crib, and honest tolerances will get you to first revenue faster than a 5-axis cell with no orders behind it.

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FAQs

Questions Buyers Ask Before Starting

Can one person run a CNC shop alone?

Yes, at low volume. One operator can load, run, and inspect parts on a 3-axis machine. The limit is not the machine; it is the quoting, purchasing, and shipping that happen while the spindle runs.

Plan for a second person once you pass roughly 30 billable spindle hours a week. Before that, a part-time helper for deburring and packing often pays for itself.

Should I buy new or used for the first machine?

Used machines get you to revenue faster and cost less. The risk is hidden wear: ball screws, spindle bearings, and linear guides. Inspect under power and ask for backlash readings.

New machines come with a warranty and a known geometry. If your first customer demands tight tolerance and a first article report, a new machine reduces the risk of failing that first run.

What tolerance can a starter shop realistically hold?

A well-maintained 3-axis VMC holds ±0.01 mm on a good day with stable temperature and sharp tooling. Pushing to ±0.005 mm needs climate control, probing, and a disciplined process.

Be honest with customers about this. Promising ±0.005 mm and delivering ±0.02 mm loses the account faster than quoting the wider number up front.

How do I price the first jobs?

Start with machine hour rate plus material plus tooling plus a setup allowance. Track actual hours on the first ten jobs and compare. Most new shops discover their setup time was double the estimate.

Do not price below cost to win a logo. A low first price sets the ceiling for every future order from that customer.

What certifications do I need to start?

None to open the doors. Certifications matter when a customer requires them. ISO 9001:2015 is the common entry point for general industrial work. Automotive buyers ask for IATF 16949:2016, and medical work brings ISO 13485:2016.

Budget for the audit and the documentation time, not just the certificate. The paperwork is the real cost.

When should I outsource instead of buying a machine?

Outsource any process you run less than a few hours a week. Grinding, EDM, anodizing, and heat treatment are typical. Buying a machine for occasional work ties up cash and floor space.

The same logic applies to 5-axis work before you have a steady order book. Send it out, keep the margin, and buy the machine when the volume justifies it.