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 business plan 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

Drone Business Plan 1
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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 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 CustomersGrowthYear 1Year 2Year 3Year 4Year 5CAGR
Individual Consumers19%24 50026 95029 64532 61035 87010%
Real Estate Agents28%32 50035 75039 32543 25847 58310%
Farmers33%35 00038 50042 35046 58551 24410%
Industries20%25 00027 50030 25033 27536 60310%
Total100%117 000128 700141 570155 727171 30010%

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 SalesYear 1Year 2Year 3
Aerial Photography & Video Making1 5301 7501 950
Agricultural Inspection750800900
Commercial, Industrial & Real Estate Inspection650670700
Drone Selling, Renting & Repairing Services2 0002 3002 700
TOTAL UNIT SALES4 9305 5206 250
Unit PricesYear 1Year 2Year 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 CostsYear 1Year 2Year 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

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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 1Year 2Year 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.

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 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 1Year 2Year 3
Plan Month123
Current Interest Rate9,50%9,80%10,20%
Long-term Interest Rate9,50%9,70%10,00%
Tax Rate25,40%26,50%28,60%
Other000

8.2 Brake-even Analysis

Drone Business Plan - Brake-even Analysis

Brake-Even Analysis
Monthly Units Break-even4500
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 1Year 2Year 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/Sales0,19%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 ReceivedYear 1Year 2Year 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
ExpendituresYear 1Year 2Year 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
AssetsYear 1Year 2Year 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 CapitalYear 1Year 2Year 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 1Year 2Year 3INDUSTRY PROFILE
Sales Growth4,18%4,49%4,80%5,28%
Percent of Total Assets0000
Accounts Receivable5,39%5,79%6,20%12,80%
Inventory1,78%1,91%2,04%12,94%
Other Current Assets1,68%1,81%1,93%36,17%
Total Current Assets132,99%142,99%152,99%72,07%
Long-term Assets-9,09%-9,77%-10,46%77,09%
TOTAL ASSETS96,00%103,22%110,44%132,00%
Current Liabilities4,49%4,83%5,17%36,04%
Long-term Liabilities0,00%0,00%0,00%34,06%
Total Liabilities4,49%4,83%5,17%71,41%
NET WORTH95,35%102,52%109,69%59,27%
Percent of Sales
Sales96,00%103,22%110,44%132,00%
Gross Margin90,41%97,21%104,01%0,00%
Selling, General & Administrative Expenses71,32%76,68%82,04%86,06%
Advertising Expenses1,98%2,13%2,28%1,85%
Profit Before Interest and Taxes25,41%27,32%29,23%3,78%
Main Ratios
Current24,8326,6928,562,15
Quick24,3826,2228,051,11
Total Debt to Total Assets2,57%2,77%2,96%88,57%
Pre-tax Return on Net Worth64,16%68,98%73,81%5,81%
Pre-tax Return on Assets62,28%66,97%71,65%11,88%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin18,43%19,82%21,20%N.A.
Return on Equity45,88%49,33%52,78%N.A.
Activity Ratios
Accounts Receivable Turnover4,384,715,04N.A.
Collection Days88,3294,96101,60N.A.
Inventory Turnover18,9120,3321,76N.A.
Accounts Payable Turnover13,6014,6315,65N.A.
Payment Days25,9227,8729,82N.A.
Total Asset Turnover1,771,902,03N.A.
Debt Ratios
Debt to Net Worth000N.A.
Current Liab. to Liab.0,961,031,10N.A.
Liquidity Ratios
Net Working Capital$116 105$124 836$133 568N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0,4320,460,50N.A.
Current Debt/Total Assets4%4%4%N.A.
Acid Test22,7124,4226,13N.A.
Sales/Net Worth1,611,731,86N.A.
Dividend Payout000N.A.

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Appendix

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