Engine builders...this machining cost sound excessive?

I can see a shop charging $50 per hour and making a living. The owner's wife would have to pay for health insurance, the machinery would have to be paid for and fully depreciated, the building wouldn't be valued very high, no employees, all tooling on hand, run only 1 machine at a time [industrial electricity has a very expensive peak load charge], and only take in engines you are experienced in [no Screwbarus].

The other side is if you are starting up a shop, you have a newer building [leased?], new machinery, new tooling required, employees, unemployment comp., high town taxes, employee health ins, etc,etc. Probably a half to one million to start up? Opinions welcome. In CT, taxes are based @ 70%, so 1,000,000 @ 70% = 700,000 X $33 per $1000 = $23,000 to the town. And if you had a cool million, you'd expect a 5% return on your money so add another $50,000. So, after adding it all up $100 per hour may not be enough!

Just thinking out loud. You can tell I'm not an economist.