Table of Content

    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 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 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 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

    Drone Business Plan - 3 Years Profit Forecast

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    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 business, 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 business, 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.

    Drone Business Plan - Startup Cost

    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

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    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 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:

    Drone Business Plan - Marketing Segmentation

    • 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.

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    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

    Drone Business Plan - Sales Monthly

    6.4 Sales Yearly

    Drone Business Plan - Sales Yearly

    6.5 Sales Forecast

    Our forecasted sales are summarized in the following column charts:

     

    Drone Business Plan - Unit Sales

    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

    Any questions? Get in Touch!

    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 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

    Drone Business Plan - 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

    Drone Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Drone Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Drone Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Drone Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Drone Business Plan - 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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