How Much Does It Cost to Start a Machine Shop?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 2
- 2 min read
Starting a machine shop is a serious investment — but for entrepreneurs in precision machining, CNC milling, metal fabrication, and tooling, it can be a highly profitable venture. Whether you're targeting industries like automotive, aerospace, or construction, understanding the startup costs is essential for planning and securing funding.
At Wexford Insurance, we help machine shop owners protect their investments with tailored insurance programs designed for the machining and manufacturing industry. In this guide, we’ll break down the typical costs involved in launching a machine shop — including equipment, facility, staffing, and insurance.
Estimated Startup Costs for a Machine Shop
Startup costs vary depending on the size of your operation, location, and services offered. Here's a breakdown of the major expenses:
1. Equipment Costs
CNC Machines (Mill, Lathe, Router): $100,000–$300,000 (new)
Used Equipment: $30,000–$50,000 for basic setups
Tooling, Compressors, Welding Stations: $10,000–$20,000
CAD/CAM Software: $2,000–$10,000 annually
Explore more at Practical Machinist Forum.
2. Facility and Utilities
Lease or Rent: $1,250–$3,500/month
Electrical Setup and Safety Improvements: $3,000–$10,000
Utilities and Maintenance: $500–$1,000/month
3. Staffing and Training
Skilled Machinists and Welders: $45,000–$70,000/year per employee
Certifications (e.g., NIMS, AWS): $500–$2,000 per employee
Payroll and HR Software: $100–$500/month
4. Marketing and Technology
Website and Branding: $500–$2,000
SEO and Lead Generation Tools: $100–$500/month
CRM and Quoting Software: $50–$200/month
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5. Insurance Costs for a Machine Shop
Insurance is a critical part of your startup budget. At Wexford Insurance, we recommend budgeting for the following policies:
Insurance Type | Estimated Annual Cost |
General Liability | $500–$1,500 |
Commercial Property | $1,000–$3,000 |
Commercial Auto | $1,200–$2,500 |
Workers Compensation | Varies by state & payroll |
Equipment Breakdown | $500–$1,500 |
These costs vary based on your location, number of employees, and equipment value. Learn more about our machine shop insurance programs.
Total Estimated Startup Cost
Depending on your setup, the total cost to start a machine shop can range from:
Lean Startup (Used Equipment): $50,000–$100,000
Mid-Size Operation: $250,000–$500,000
Full-Scale CNC Shop: $500,000+
Final Thoughts
Starting a machine shop requires careful planning, smart budgeting, and the right insurance coverage. At Wexford Insurance, we specialize in protecting machining businesses with custom insurance solutions tailored to your operations.
Ready to launch your machine shop?
Contact Wexford Insurance today to speak with an expert who understands your industry.
