Drone business plan for starting your own company
Do you want to start a drone photography business? Well, it is an amazing business that offers several opportunities. In these days, whenever there is a need to capture unique and high-quality aerial shoots the first thing that comes in mind is drone.
Whether it’s an agricultural sector or an industrial unit, people require drones to study different details and to capture descriptive views which can be shown to others. Moreover, drones are also needed in events, ceremonies and real estate photography.
So, if you are thinking about starting a drone business you have to first formulate a drone business plan. Your drone business plan should envisage all the crucial details like your future financial strategy, your marketing strategy and a critical examination of your target market. In your uav business plan, it’s better to also include solutions to possible problems that you can encounter during your journey.
Here we are providing you a sample business plan for a drone business startup named ‘Drone Techs’ so that you can have an idea of, how a comprehensive and effective drone business plan looks like.
Executive Summary
2.1 The Business
Drone Techs will be a licensed drone aerial photography business owned by Denzel Smith. Drone Techs is aimed to provide fully-insured drones and the services of FAA authorized drone operators throughout Cleveland, United States.
2.2 Management of the Drone Business
Smith is an MBA with extreme passion for photography. To run his aerial drone business, he’ll hire a team of technicians, photographers, drone pilots, sales executives, graphics editors, drivers, and general workers, and he’ll be managing the business himself.
2.3 Customers
Knowing your customers before making your drone plan of business companies can assist you in estimating the required things and personnel as well in devising your drone marketing strategy.
Drone Techs found that its target customers will be the residents of Cleveland and people belonging to the agriculture, industrial and real estate sector.
2.4 The Business Metrics and Targets
Before you start drone business you must define targets for you. To assess its performance time-to-time Drone Techs will be evaluating its sales revenue, sales growth, and net profit margin. Company’s major targets are:
- To earn a net profit margin of $15k per month by the end of the first year and to increase it by 125 percent by the end of the second year
- To recover the startup costs by the end of the second year
Company Summary
3.1 Company Owner
Drone Techs will be solely owned by Denzel Smith who is an MBA as well as an expert photographer. Smith has always been passionate about aerial photography. For the past four years, he has been capturing different aerial views using his drone as a hobbyist.
3.2 Why the Business is being started
To make the best use of his photography and management skills, Smith has decided to start a drone business. His decision can also be attributed to the project he did last year when he worked with a real estate company on a small project as a surveyor and professional photographer. His feedback was exceptionally great, so looking at the opportunities in this uav business plan, Smith decided to go for a proper start.
3.3 How the Business will be started
Smith already had two professional drones, but now as he aims to properly step in this uav business plan, he has decided to buy a few more, including the special drone with sensors and sprayers, used in agricultural fields.
An office building in Cleveland will be taken on rent after which Smith will purchase the required equipment and will hire a drone pilot, a photographer, technicians, sales executives, and graphics editors.
The detailed information about the start-up is given below:
| Start-up Expenses | ||
| Legal | $132 000 | |
| Consultants | $0 | |
| Insurance | $75 000 | |
| Rent | $75 000 | |
| Research and Development | $75 000 | |
| Expensed Equipment | $75 000 | |
| Signs | $2 300 | |
| TOTAL START-UP EXPENSES | $434 300 | |
| Start-up Assets | $410 000 | |
| Cash Required | $521 000 | |
| Start-up Inventory | $85 000 | |
| Other Current Assets | $212 000 | |
| Long-term Assets | $320 000 | |
| TOTAL ASSETS | $1 548 000 | |
| Total Requirements | $1 982 300 | |
| START-UP FUNDING | ||
| Start-up Expenses to Fund | $434 300 | |
| Start-up Assets to Fund | $1 548 000 | |
| TOTAL FUNDING REQUIRED | $1 982 300 | |
| Assets | ||
| Non-cash Assets from Start-up | $730 000 | |
| Cash Requirements from Start-up | $521 000 | |
| Additional Cash Raised | $32 300 | |
| Cash Balance on Starting Date | $22 750 | |
| TOTAL ASSETS | $1 306 050 | |
| Liabilities and Capital | ||
| Liabilities | $32 000 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $45 000 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $77 000 | |
| Capital | ||
| Planned Investment | $1 982 300 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $1 982 300 | |
| Loss at Start-up (Start-up Expenses) | ($753 250) | |
| TOTAL CAPITAL | $1 229 050 | |
| TOTAL CAPITAL AND LIABILITIES | $1 306 050 | |
| Total Funding | $1 982 300 | |
Services for Customers
To avail the drone business opportunities while generating considerable profits, you are required to clearly define your business strategy services.
Note
You have to decide whether or not you will be providing services other than just drone photography. Whatever they are, you must define them in your drone business plan because your equipment and future strategy will be entirely dependent upon them.
Drone Techs will be offering the following services to their customers:
- Aerial Photography & Video Making: Our professional photographers will take perfect and high-quality shoots of your events using 4k camera and digital imaging techniques.
- Agricultural Inspection: Our special agriculture drone will help farmers in identifying irrigation problems, pest or fungal invasion, and soil variability issues without surveying large fields.
- Commercial, Industrial & Real Estate Inspection: Our trained workers will capture different aerial views for mapping and surveying industrial units and the real estate sector.
- Drone Selling, Renting & Repairing Services: Our experienced technicians will repair any issue regarding drones. Moreover, Drone Techs will also be selling drones as well as giving them on rent.
Marketing Analysis of Drone Business
Business Plan for Investors
5.1 Market Trends
After Federal Aviation Administration has permitted the commercial use of drones, drone business is seeing growth besides just photography, that is, in mining, surveying, and in industrial, agricultural and real estate sectors. The business is expected to grow more by the coming years.
5.2 Marketing Segmentation
No matter how many drone business ideas you do have, you can’t succeed if you fail to make or execute an effective drone marketing plan. Developing an effective plan for drone real estate marketing is only possible if you do thorough research on who will be your customers.
Drone Techs did critical research on the market and identified the following target groups:
- Individual Consumers, who’ll use drone photography services in ceremonies and events and are expected to avail renting and repairing services too.
- Real Estate Agents will use aerial photography and video making services for mapping and monitoring their estate.
- Farmers in the Agricultural Sector will use our special agriculture drones with sensors to survey their farms, to monitor crop yield, and to remain informed about any fungal and infectious infestation.
- Industries will use our services for infrastructure inspection.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Individual Consumers | 19% | 24 500 | 26 950 | 29 645 | 32 610 | 35 870 | 10% |
| Real Estate Agents | 28% | 32 500 | 35 750 | 39 325 | 43 258 | 47 583 | 10% |
| Farmers | 33% | 35 000 | 38 500 | 42 350 | 46 585 | 51 244 | 10% |
| Industries | 20% | 25 000 | 27 500 | 30 250 | 33 275 | 36 603 | 10% |
| Total | 100% | 117 000 | 128 700 | 141 570 | 155 727 | 171 300 | 10% |
5.3 Business Target
Our main business targets are as follows:
- To earn a net profit margin of $15k per month by the end of the first year
- To increase net profit margin by 125 percent by the end of the second year
5.4 Product Pricing
Our prices will be a bit high as we’ll have to manage costly equipment and highly trained staff to provide our services.
Strategy
After gathering data about how to start drone business and deciding your services, the next step is to think about drone business ideas that can help you in getting ahead of your competitors.
6.1 Competitive Analysis
Our biggest competitive advantage lies in our wide-ranged services. Secondly, just we in the whole town are offering graphic editing and digital imagery services on photos and films taken with drones. And, only we in our town will be giving the drones on rent. Lastly, Smith has already done a project with great feedback which will be a plus point.
6.2 Sales Strategy
To avail maximum drone business opportunities it is required to bring in more customers to your site. In doing so, it is essential to develop a really effective advertisement strategy in your drone business plan, one that can influence others to avail your services.
Drone Techs will use the following techniques to advertise itself:
- Ensuring strong web-presence
- Posting aerial images and films on social media platforms and in magazines
- Putting high quality and digitally edited posters in streets
- Giving 5% discount to industrial, agricultural and real estate sector for the first two months
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Our forecasted sales are summarized in the following column charts:
The detailed information about the sales forecast is given in the following table:
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Aerial Photography & Video Making | 1 530 | 1 750 | 1 950 |
| Agricultural Inspection | 750 | 800 | 900 |
| Commercial, Industrial & Real Estate Inspection | 650 | 670 | 700 |
| Drone Selling, Renting & Repairing Services | 2 000 | 2 300 | 2 700 |
| TOTAL UNIT SALES | 4 930 | 5 520 | 6 250 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Aerial Photography & Video Making | $150,00 | $165,00 | $180,00 |
| Agricultural Inspection | $250,00 | $275,00 | $300,00 |
| Commercial, Industrial & Real Estate Inspection | $250,00 | $275,00 | $300,00 |
| Drone Selling, Renting & Repairing Services | $100,00 | $125,00 | $150,00 |
| Sales | |||
| Aerial Photography & Video Making | $229 500,00 | $288 750,00 | $351 000,00 |
| Agricultural Inspection | $187 500,00 | $220 000,00 | $270 000,00 |
| Commercial, Industrial & Real Estate Inspection | $162 500,00 | $184 250,00 | $210 000,00 |
| Drone Selling, Renting & Repairing Services | $200 000,00 | $287 500,00 | $405 000,00 |
| TOTAL SALES | $779 500,00 | $980 500,00 | $1 236 000,00 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Aerial Photography & Video Making | $81,00 | $85,00 | $90,00 |
| Agricultural Inspection | $170,00 | $180,00 | $200,00 |
| Commercial, Industrial & Real Estate Inspection | $145,00 | $161,00 | $167,00 |
| Drone Selling, Renting & Repairing Services | $50,00 | $54,00 | $59,00 |
| Direct Cost of Sales | |||
| Aerial Photography & Video Making | $123 930,00 | $148 750,00 | $175 500,00 |
| Agricultural Inspection | $127 500,00 | $144 000,00 | $180 000,00 |
| Commercial, Industrial & Real Estate Inspection | $94 250,00 | $107 870,00 | $116 900,00 |
| Drone Selling, Renting & Repairing Services | $100 000,00 | $124 200,00 | $159 300,00 |
| Subtotal Direct Cost of Sales | $445 680,00 | $524 820,00 | $631 700,00 |
Personnel plan
If you have made up your mind to start drone photography or drone rental business, make sure that you are clear about the persons you’ll have to hire. As a business can’t run successfully without devoted and talented employees, it is essential to develop a personnel plan even before thinking about how to start a commercial drone business.
7.1 Company Staff
Drone Techs will hire the following persons:
- 1 Accountant for maintaining financial records
- 3 Operators for operating the drones
- 2 Professional Photographers for filming events
- 2 Graphics Editors for processing photographs and videos
- 2 Technicians for repairing & regulating drones
- 2 General Workers for keeping a record of drones given on rent
- 2 Sales Executives for executing sales strategy
- 1 Web Developer for managing company’s websites and social sites
- 2 Assistants/Drivers for transportation and everyday tasks
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Accountant | $18 500 | $20 350 | $22 385 |
| Operators | $45 000 | $49 500 | $54 450 |
| Professional Photographers | $35 000 | $38 500 | $42 350 |
| Graphics Editors | $40 000 | $44 000 | $48 400 |
| Technicians | $30 000 | $33 000 | $36 300 |
| General Workers | $20 000 | $22 000 | $24 200 |
| Sales Executives | $45 000 | $49 500 | $54 450 |
| Web Developer | $17 500 | $19 250 | $21 175 |
| Assistants/Drivers | $25 000 | $27 500 | $30 250 |
| Total Salaries | $276 000 | $303 600 | $333 960 |
Financial Plan
Before you start any business it is essential to have a clear idea about how much money you can spend on its startup. You must know your budget and finances before you even think about how to start a drone company. As this business requires a huge investment to buy drones thus it’s necessary for anyone who steps in this business to have a detailed and flawless financial plan. One which covers all the details like investment costs, advertisement costs, salaries of employees, financial targets and ways to deal with loss, if you fail to generate desired profit drone business plan.
Moreover, if you want to start a business with drones you must examine various drone business ideas before making your financial plan. It will help you in deciding the sort of drones that you can buy while remaining in your budget to provide your decided services.
For the businesses which require large investments group business and expenditures like this, it’s better to get a financial plan written by a person of this domain. You can also develop it by yourself if you have the skill to play with stats.
Being a master’s in business administration, Smith knew the importance of an effective financial plan. A sample of financial plan which he developed after great thinking and analyzing different stats is given here for anyone who wants to benefit.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 9,50% | 9,80% | 10,20% |
| Long-term Interest Rate | 9,50% | 9,70% | 10,00% |
| Tax Rate | 25,40% | 26,50% | 28,60% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | ||
| Monthly Units Break-even | 4500 | |
| Monthly Revenue Break-even | $125 000 | |
| Assumptions: | ||
| Average Per-Unit Revenue | $200,00 | |
| Average Per-Unit Variable Cost | $0,95 | |
| Estimated Monthly Fixed Cost | $175 500 | |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $779 500 | $980 500 | $1 236 000 |
| Direct Cost of Sales | $445 680 | $524 820 | $631 700 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $445 680 | $524 820 | $631 700 |
| Gross Profit | $333 820 | $455 680 | $604 300 |
| Gross Margin % | 42,82% | 46,47% | 48,89% |
| Expenses | |||
| Payroll | $276 000 | $303 600 | $333 960 |
| Sales and Marketing and Other Expenses | $2 000 | $2 150 | $2 300 |
| Depreciation | $1 850 | $1 900 | $1 940 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $3 500 | $3 750 | $4 200 |
| Insurance | $1 950 | $2 050 | $2 250 |
| Rent | $5 500 | $6 000 | $6 550 |
| Payroll Taxes | $35 600 | $38 500 | $40 250 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $326 400 | $357 950 | $391 450 |
| Profit Before Interest and Taxes | $7 420 | $97 730 | $212 850 |
| EBITDA | $7 420 | $97 730 | $212 850 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $5 936 | $78 184 | $170 280 |
| Net Profit | $1 484 | $19 546 | $42 570 |
| Net Profit/Sales | 0,19% | 1,99% | 3,44% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $35 000 | $37 500 | $40 250 |
| Cash from Receivables | $6 500 | $7 000 | $8 500 |
| SUBTOTAL CASH FROM OPERATIONS | $50 250 | $53 500 | $57 000 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $45 250 | $47 750 | $51 000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $20 400 | $22 500 | $25 000 |
| Bill Payments | $15 400 | $16 500 | $17 500 |
| SUBTOTAL SPENT ON OPERATIONS | $35 500 | $36 750 | $38 000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $38 750 | $39 000 | $41 250 |
| Net Cash Flow | $12 000 | $14 500 | $17 000 |
| Cash Balance | $20 000 | $22 000 | $24 000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $175 122 | $184 000 | $192 878 |
| Accounts Receivable | $12 322 | $13 220 | $14 118 |
| Inventory | $12 444 | $13 430 | $14 416 |
| Other Current Assets | $1 220 | $1 400 | $1 580 |
| TOTAL CURRENT ASSETS | $167 200 | $178 000 | $188 800 |
| Long-term Assets | |||
| Long-term Assets | $10 000 | $10 000 | $10 000 |
| Accumulated Depreciation | $11 500 | $12 450 | $13 400 |
| TOTAL LONG-TERM ASSETS | $975 | $750 | $525 |
| TOTAL ASSETS | $200 500 | $245 500 | $290 500 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $8 723 | $10 643 | $12 562 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $8 723 | $10 643 | $12 562 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $8 723 | $10 643 | $12 562 |
| Paid-in Capital | $27 600 | $33 672 | $39 744 |
| Retained Earnings | $44 759 | $54 606 | $64 453 |
| Earnings | $92 652 | $113 036 | $133 419 |
| TOTAL CAPITAL | $174 211 | $212 538 | $250 864 |
| TOTAL LIABILITIES AND CAPITAL | $182 932 | $223 177 | $263 422 |
| Net Worth | $167 495 | $204 344 | $241 193 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 4,18% | 4,49% | 4,80% | 5,28% |
| Percent of Total Assets | 0 | 0 | 0 | 0 |
| Accounts Receivable | 5,39% | 5,79% | 6,20% | 12,80% |
| Inventory | 1,78% | 1,91% | 2,04% | 12,94% |
| Other Current Assets | 1,68% | 1,81% | 1,93% | 36,17% |
| Total Current Assets | 132,99% | 142,99% | 152,99% | 72,07% |
| Long-term Assets | -9,09% | -9,77% | -10,46% | 77,09% |
| TOTAL ASSETS | 96,00% | 103,22% | 110,44% | 132,00% |
| Current Liabilities | 4,49% | 4,83% | 5,17% | 36,04% |
| Long-term Liabilities | 0,00% | 0,00% | 0,00% | 34,06% |
| Total Liabilities | 4,49% | 4,83% | 5,17% | 71,41% |
| NET WORTH | 95,35% | 102,52% | 109,69% | 59,27% |
| Percent of Sales | ||||
| Sales | 96,00% | 103,22% | 110,44% | 132,00% |
| Gross Margin | 90,41% | 97,21% | 104,01% | 0,00% |
| Selling, General & Administrative Expenses | 71,32% | 76,68% | 82,04% | 86,06% |
| Advertising Expenses | 1,98% | 2,13% | 2,28% | 1,85% |
| Profit Before Interest and Taxes | 25,41% | 27,32% | 29,23% | 3,78% |
| Main Ratios | ||||
| Current | 24,83 | 26,69 | 28,56 | 2,15 |
| Quick | 24,38 | 26,22 | 28,05 | 1,11 |
| Total Debt to Total Assets | 2,57% | 2,77% | 2,96% | 88,57% |
| Pre-tax Return on Net Worth | 64,16% | 68,98% | 73,81% | 5,81% |
| Pre-tax Return on Assets | 62,28% | 66,97% | 71,65% | 11,88% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 18,43% | 19,82% | 21,20% | N.A. |
| Return on Equity | 45,88% | 49,33% | 52,78% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4,38 | 4,71 | 5,04 | N.A. |
| Collection Days | 88,32 | 94,96 | 101,60 | N.A. |
| Inventory Turnover | 18,91 | 20,33 | 21,76 | N.A. |
| Accounts Payable Turnover | 13,60 | 14,63 | 15,65 | N.A. |
| Payment Days | 25,92 | 27,87 | 29,82 | N.A. |
| Total Asset Turnover | 1,77 | 1,90 | 2,03 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | 0 | 0 | N.A. |
| Current Liab. to Liab. | 0,96 | 1,03 | 1,10 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $116 105 | $124 836 | $133 568 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0,432 | 0,46 | 0,50 | N.A. |
| Current Debt/Total Assets | 4% | 4% | 4% | N.A. |
| Acid Test | 22,71 | 24,42 | 26,13 | N.A. |
| Sales/Net Worth | 1,61 | 1,73 | 1,86 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
Appendix
So, what are you waiting for if you have made up your mind to start a drone business? An effective and competent business plan, most probably!
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Thank you for the information and direction. Not sure why, but the sample drone template pulled up as a hospital template.