Even has I am selling my 10 watt diode laser I would not recommend it for commercial applications . Your better off with a water cooled 30 or 40 watt...
Since we don't know the material thickness, a 1/8" bit may be a problem. Especially if the stock is 3/4" thick hardwood. Cutting will really have to...
I'd think the smallest reasonably sized router bit to cut any reasonable depth would be 1/4". So you're gonna lose at least that. And things are out...