Do you want to start drone business?
Are you thinking about starting a drone business? Well, starting this business is very easy and extremely profitable since UAVs (or commonly referred as drones) find their applications in many industrial and non-industrial fields.
The first thing you should do is to develop a comprehensive plan for your business. The business plan will not only help you in startup but it will also help you in taking important decisions for your company over the next years. In case you don’t know how to write it, we are providing a detailed business plan for a drone business startup ‘DroneCo’ to help you avoid the trouble of making a plan yourself.
2.1 The Business
The Drone Co. will be a licensed and insured FAA authorized commercial aerial drone company in the United States. The company’s main office will be located in the main commercial district of Chicago.
DroneCo will be solely owned and operated by Ronald Mike who is a passionate photographer and has extensive experience in this industry. Mike will hire a small team of operators, assistants, sales executives, technicians and graphics editors for his drone startup business.
Our target customers are the individual consumers, agricultural sector, industrial sector and print and digital media companies based in Chicago.
2.4 Target of the Company
Our company’s target are as follows:
3.1 Company Owner
DroneCo will be solely owned by Ronald Mike, a professional photographer who has been in this industry for more than 10 years.
3.2 Why the Business is being started
Mike has been with country’s biggest magazines as the lead photographer including National Geographic Magazine. His photography skills are well known across the US. He decided to start his own venture to explore the photographic industry as much as possible by contributing to all niches of photography.
3.3 How the Business will be started
Traditional methods of photography have now been replaced with drone photography. Drones can be used for a variety of purposes, but out of all drone business ideas, drone photography became their biggest business application. Considering the advantages drones can provide in the photography business, DroneCo will be started as a commercial drone company. The company has forecasted following costs for the start-up:
The detailed information about the start-up is given below:
|Research and Development||$32,750|
|TOTAL START-UP EXPENSES||$187,300|
|Other Current Assets||$232,500|
|Start-up Expenses to Fund||$11,875|
|Start-up Assets to Fund||$15,000|
|TOTAL FUNDING REQUIRED||$0|
|Non-cash Assets from Start-up||$18,750|
|Cash Requirements from Start-up||$0|
|Additional Cash Raised||$18,750|
|Cash Balance on Starting Date||$21,875|
|Liabilities and Capital||$0|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$695,000|
|Loss at Start-up (Start-up Expenses)||$313,125|
|TOTAL CAPITAL AND LIABILITIES||$251,875|
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Services for customers
It is very important to decide what services will you provide with your drones because the planning of all subsequent stages depend on it. So, make sure to think it through, before you start thinking about how to start a drone business.
DroneCo will provide professional aerial photography and video service using the latest technology drones. Our UAVs combined with state of the art camera stabilization will capture super-smooth footages. We will provide following services to our customers:
- Aerial filming & photography
- Agricultural inspection
- Mapping, surveying & industrial inspection
- Drone selling & repairing services
Marketing Analysis of drone business
Marketing analysis is an important component of an effective drone business plan because it helps us in developing an effective drone business model. If you are wondering how to carry out marketing analysis prior to starting a drone company, you can take help from this drone business plan sample.
Business Plan for Investors
5.1 Market Trends
Drones or Unmanned Aerial Vehicles (UAVs) were built for military applications that’s why they weren’t being utilized for any commercial purposes. Considering the advantages offered by drones in various commercial industries especially their application in aerial photography, construction, and agriculture the Federal Aviation Administration (FAA) allowed their commercial use in 2015. Since then, this industry is increasing at a rapid rate. The sales of drones are expected to surpass $12 billion in 2021, which is up by a CAGR (compound annual growth rate) of 7.6% from $8.5 billion as of 2016.
5.2 Marketing Segmentation
A startup can only succeed if it properly markets itself to its targeted customers. An effective marketing plan can only be developed if you know your prospective customers.
That’s why you must find out the marketing segmentation of your customers before developing the business plan for a drone company.
DroneCo will target both the residential and corporate sector based in Chicago. The marketing segmentation of our target audience is as follows:
The detailed marketing segmentation is as follows:
5.2.1 Individual Consumers:
This group includes all those people who will acquire our services for personal or family purposes. This group is expected to use our aerial photography and filming services for their weddings and other events.
5.2.2 Print & Digital Media:
This group includes all print and digital media companies include filmmakers who will also need our aerial filming and photography services.
5.2.3 Agricultural Sector:
Drones are now extensively used for inspecting agricultural sites as well as to monitor the crop yield. Farmers and agriculturists can either buy drones from us or can just acquire our agricultural imagery services.
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5.2.4 Industrial Sector:
Drones also used for surveying the construction sites and monitor performance, especially in the inaccessible places. They are also used for getting imagery for mapping purposes.
The detailed market analysis of our potential customers is given in the following table:
|Potential Customers||Growth||YEAR 1||YEAR 2||YEAR 3||YEAR 4||YEAR 5||CAGR|
|Print & Digital Media||38%||22,334||32,344||43,665||52,544||66,432||10.00%|
5.3 Business Target
Our main business targets are as follows:
- To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
- To balance the initial cost of the startup with earned profits by the end of the first year
5.4 Product Pricing
Considering the market demands and the competitive aspects, we have priced our drones as well as the drone photography services in similar ranges as of our competitors.
After marketing analysis, sales strategy is the second most important component of a business plan. Therefore, considering its importance, you must properly develop it before you think about how to start drone business.
Great service. Good turnaround time and quality work.
One can easily think of several attractive drone business ideas but the success of any such idea lies in a sound sales strategy so make sure to plan it before you start your own drone business.
6.1 Competitive Analysis
DroneCo will have various competitors still we hope to thrive due to our various competitive aspects. We will use latest technology drones which will be operated by highly trained and experienced operators. Lastly, we will provide unparalleled customer service to ensure maximum customer retainage.
6.2 Sales Strategy
- We will advertise ourselves in magazines, newspapers, TV stations, and social media
- We will build a strong online presence by developing a website and keeping it SEO friendly. The website will also be used for booking our services or finding information about us
- We will offer a discount on our services for the first three 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 sales forecast is given in the following table:
|Unit Sales||Year 1||Year 2||Year 3|
|Aerial filming & photography||1,887,030||2,680,320||2,588,240|
|Mapping, surveying & industrial inspection||539,320||770230||1,002,310|
|Drone selling & repairing services||265,450||322,390||393,320|
|TOTAL UNIT SALES||3,494,170||4,588,370||4,807,410|
|Unit Prices||Year 1||Year 2||Year 3|
|Aerial filming & photography||$140.00||$150.00||$160.00|
|Mapping, surveying & industrial inspection||$700.00||$800.00||$900.00|
|Drone selling & repairing services||$650.00||$750.00||$850.00|
|Aerial filming & photography||$2,149,800||$2,784,000||$3,383,200|
|Mapping, surveying & industrial inspection||$50,110||$71,600||$93,000|
|Drone selling & repairing services||$139,350||$194,600||$249,850|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Aerial filming & photography||$0.70||$0.80||$0.90|
|Mapping, surveying & industrial inspection||$0.30||$0.35||$0.40|
|Drone selling & repairing services||$3.00||$3.50||$4.00|
|Direct Cost of Sales|
|Aerial filming & photography||$989,300||$1,839,000||$2,679,700|
|Mapping, surveying & industrial inspection||$17,900||$35,000||$52,100|
|Drone selling & repairing services||$19,400||$67,600||$115,800|
|Subtotal Direct Cost of Sales||$1,294,100||$1,699,400||$2,104,700|
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Personnel plan gives you an estimation of the required staff and their salaries over the next few years so make sure to properly plan it before you think about how to start a commercial drone business.
7.1 Company Staff
Mike will act as the Chief Executive Officer of the company. The company will initially hire following people:
- 2 Administrators/Accountants for maintaining financial records
- 4 Sales Executives for discovering new ventures
- 3 Assistants for undertaking various tasks at the office and operate company’s website and social media pages
- 4 Technicians for repairing/addressing problems in drones
- 12 Operators for operating the drones
- 6 Graphics Editors for processing photography and videos
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
You must know all finances which you have at your disposal and which you will be needing for your startup before you think about how to start a drone company. DroneCo’s financial plan is as follows:
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||10.00%||11.00%||12.00%|
|Long-term Interest Rate||10.00%||10.00%||10.00%|
8.2 Brake-even Analysis
|Monthly Units Break-even||5530|
|Monthly Revenue Break-even||$159,740|
|Average Per-Unit Revenue||$260.87|
|Average Per-Unit Variable Cost||$0.89|
|Estimated Monthly Fixed Cost||$196,410|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$15,100||$19,153||$23,206|
|TOTAL COST OF SALES||$15,100||$19,153||$23,206|
|Gross Margin %||94.98%||94.72%||94.46%|
|Sales and Marketing and Other Expenses||$1,850||$2,000||$2,150|
|Total Operating Expenses||$188,766||$220,744||$252,722|
|Profit Before Interest and Taxes||$105,205||$146,040||$186,875|
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 from Receivables||$7,023||$8,610||$9,297|
|SUBTOTAL CASH FROM OPERATIONS||$47,143||$53,651||$59,359|
|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||$47,143||$53,651||$55,359|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$35,296||$39,549||$43,582|
|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|
|SUBTOTAL CASH SPENT||$35,296||$35,489||$43,882|
|Net Cash Flow||$11,551||$13,167||$15,683|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$201,259||$237,468||$273,677|
|TOTAL LONG-TERM ASSETS||$980||$610||$240|
|Liabilities and Capital||Year 1||Year 2||Year 3|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$9,482||$10,792||$12,102|
|TOTAL LIABILITIES AND CAPITAL||$198,839||$232,978||$267,117|
8.6 Business Ratios
|Year 1||Year 2||Year 3||Industry Profile|
|Percent of Total Assets|
|Other Current Assets||1.75%||2.02%||2.29%||27.40%|
|Total Current Assets||138.53%||150.99%||163.45%||54.60%|
|Percent of Sales|
|Selling, General & Administrative Expenses||74.29%||71.83%||69.37%||65.20%|
|Profit Before Interest and Taxes||26.47%||29.30%||32.13%||2.86%|
|Total Debt to Total Assets||2.68%||1.04%||0.76%||67.10%|
|Pre-tax Return on Net Worth||66.83%||71.26%||75.69%||4.40%|
|Pre-tax Return on Assets||64.88%||69.75%||74.62%||9.00%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||19.20%||21.16%||23.12%||N.A.|
|Return on Equity||47.79%||50.53%||53.27%||N.A.|
|Accounts Receivable Turnover||4.56||4.56||4.56||N.A.|
|Accounts Payable Turnover||14.17||14.67||15.17||N.A.|
|Total Asset Turnover||1.84||1.55||1.26||N.A.|
|Debt to Net Worth||0||-0.02||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$120,943||$140,664||$160,385||N.A.|
|Assets to Sales||0.45||0.48||0.51||N.A.|
|Current Debt/Total Assets||4%||3%||2%||N.A.|
Illustrative business plan samples
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