From what I've been reading I need an 07 FFL to manufacture but is this only necessary when it is going to be sold?

Can I build prototypes for "personal use" without having to go through the FFL route for the time being?

When I need a design prototyped and built by a machine shop do they need an FFL themselves or can they manufacture through the FFL I'm issued?

Sorry for the noobish questions - I've been focused on getting everything modeled and researching the patent process. I thought that was overwhelming but now that I have to deal with FFL's and I'm really in over my head.

Most machine shops without an FFL won't touch a firearm or even firearm parts.  First, they don't want to deal with the regulations.  Second, there's a decent chance not all of their employees will pass a BGC.

If you're doing R&D either do your own machine work or have an FFL sign an NDA and pay his hourly rate to do it for you.

If you're designing a semi-auto, bear in mind at some point you'll want an ATF determination letter stating they have inspected it and found it's not readily convertible to be a machine gun.  They will want a sample to test.

Thank you for the information. Especially the last portion.