How To Build A Profitable Drone Business

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Drone Business Profit Title
Me with my drone

Drones are a lot of fun and an awesome business opportunity. We started our family business, then created this blog to offer advice to others that are interested in this technology. 

Table of Contents

We were reviewing our revenue forecasts for Lightwave Aerial and realized how much we’ve learned about running a profitable drone business since we started. After we refined our revenue plan I decided to write this article on how to build a profitable drone business. Hopefully, the insights will help you understand how to create a profitable business.

When building a drone business your equipment choices, the market for your services, and the specific jobs you get all play a role in determining profitability. Revenue, operating expenses, business models, and hourly rates are also important. We will look at three specific projects to demonstrate what we mean.

Business Profit Image

What is Profit?

Your drone businesses can’t live on goodwill alone- you need to turn a profit to stay afloat. So, what exactly is business profit?

Simply put, business profit is the difference between what a company spends on operating costs and what it generates in revenue. The costs can include drone hardware and software, employee salaries, marketing, and insurance. If the revenue generated exceeds the costs, then the business will be profitable.

Business Revenue Expense

The drone services market is becoming much more competitive. Bu with careful planning and a willingness to adapt as the drone industry changes, drone businesses can find success. And as the drone industry continues to grow, there will only be more opportunities for drone businesses to thrive.

How A Business Plan Determines Your Profit

A business plan is important for any drone business because it provides a framework for how the company will generate revenue and profit. It also outlines the company’s value proposition or the unique benefit that it offers to customers. The business plan also helps them to determine what products or services to offer, how to price them, and how to market them.

Drone Business Plan

There are several different drone business models, but the most common are subscription, pay-per-use, and advertising. Each model has its own advantages and disadvantages, so it’s important to choose the right one for your business.

For example, a subscription model may be a good choice if you plan to offer regularly-updated content, such as drone photography or video footage. On the other hand, a pay-per-use model may be a better option if you offer services that are used infrequently, such as drone mapping or inspections. Alternatively, some companies may choose to sell drones outright, while others may lease them or provide drone-based repair services.

Ultimately, the best drone business model is the one that best aligns with your company’s strengths and weaknesses.

Drone Business Model

How Business Revenue Determines Your Profit

Business revenue is the money that a company brings in from its normal business activities. This can come from the sale of products, services, or both. Revenue is important because it is the lifeblood of a business. Without it, a company would quickly run out of money and be forced to close its doors. drone business revenue is the money that a drone brings in from its normal business activities. This can come from the sale of products, services, or both. drone businesses need to make sure they are generating enough revenue to cover their costs and stay in operation.

Drone Business Revenue Forecast

You’ll generally set prices per job so the total revenue = number of jobs x price per job. You can increase your revenue by getting more jobs or by increasing your pricing. Let’s run a few numbers to how this works. If we charge $175 for photography jobs and $500 for video jobs, after 12 jobs we’ve made almost $10,000! But as we’ll see, if you only think about revenue then you’re in for a surprise.

How Pricing Determines Your Profit

Here are factors to consider when pricing your drone services.

What is the cost of operating your drone business? This includes the cost of your drones, pilots, and any other overhead expenses. Once you know your costs, you can start to think about what price point will allow you to make a profit.

What is your hourly rate? This includes the entire time to complete the job: roundtrip travel to the site, on-site drone work, and post-flight production. Your hourly rate is the amount you charge divided by the total time. Based on our prices for photography ($175) and vidoegraphy ($500)

Drone Project Rates

The value of your services. If you’re providing a service that is unique or in high demand, you can charge more. On the other hand, if there are many other businesses offering similar services, you’ll need to be competitive with your pricing.

Consider the competition. Take a look at what other businesses in your area are charging for similar services. This will give you an idea of what customers are willing to pay and help you determine where to price your services.

How Operating Costs Determine Your Profit

A drone business can have significant operating costs. Businesses need to factor in the cost of drone hardware, maintenance, storage, and insurance when they are calculating their operating costs. In addition, there are regulatory costs associated with drone use, such as obtaining a commercial drone pilot license. By understanding all of the potential costs associated with drone use, businesses can make more informed decisions about whether or not drone technology is right for them.

Hardware Costs

Starting a drone business can be a great way to tap into the growing demand for aerial photography and videography services. However, there are some significant costs associated with getting started in the drone business, including the cost of hardware. A quality drone can cost several thousand dollars, and you may need to purchase multiple drones to meet the needs of your business. In addition, you’ll need to invest in other hardware such as controllers, batteries, and chargers. Depending on the size and scope of your business, these costs can quickly add up. Therefore, it’s important to carefully consider the hardware costs before starting a drone business.

We have a small business and needed to minimize our startup hardware costs while still being able to provide all of our services. We settled on two drones that fit our requirements, I would fully recommend either drone for the applications.

DJI Air 2S

DJI Air 2S drone

Applications: Photography, Videography, Inspection

Cost: I paid $1300 with the “Fly More” combo package (extra batteries, ND filters, prop guards, multi-battery charger, plus s few extras) + $169 DJI replacement insurance. I ran the numbers and it’s definitely cheaper than buying everything individually. Three batteries may seem like overkill – I’ve never used more than 2 on any job. However, I have come very close to using up two batteries and having that 3rd battery gave me peace of mind. So for me, it was worth it. I was new to drones when I bought my Air 2S so the replacement insurance made sense for me.

Specs: You’ll see lots of different specs for drones but most of them are useless. For example, they give the maximum speed. But seriously, when am I ever going to fly a drone at 30 miles per hour? For me, the most important spec is flight time, and the Air 2S has about 20-25 minutes of flight which is decent.

Why We Chose It: When I purchased the Air2S it was the newest tech at the time. It has a 1″ sensor which was the largest sensor for a drone that size. Also it has amazing intelligent flight modes, I do a lot of my photography using the “quick shots” capability. It’s small and quiet. so it doesn’t attract too much attention and I can fly it indoors which opens a lot of potential work

Problems: I have nothing bad to say about this drone. We have been very satisfied.

Phantom 4 Pro

DJI Phantom 4Pro drone

Applications: Mapping & Survey

Cost: I bought a refurbished unit for $2000 on Drone Nerds (DJI didn’t have any in stock) – it came with a full warranty which I’m glad I got. I tried eBay because you can get awesome deals but after I lost several auctions I couldn’t take the emotional stress.

Specs: The basic performance is similar to the Air 2S, with a slightly longer flight time

Why We Chose It: Mechanical shutter to minimize image blur in orthomosaic maps. Well-respected, solid all-around drone. 1″ sensor.

Problems: It’s an old drone with older technology. The Gimbal system is very fragile. The technology is a bit temperamental (the compass needs constant recalibration). It’s bigger and louder so it draws attention, but that’s OK for our construction jobs. The Phantom product line has been discontinued so they are very hard to find.

For a more detailed review see our article on recommended drones.

Software Costs

The software you need depends on your services. In our business, the software falls into four categories: video editing, flight automation, map generation, and website.

Photo & Video Editing – we use Adobe products. For photography we use Lightroom, and for video, we use Premiere Pro.

Flight Automation – flight automation software is needed to fly the patterns you’ll need for mapping and surveying. We use Map Pilot Pro and Dronelink.

Map Generation – map generation software performs photogrammetry and collected data to generate geo-referenced Matt. We use Maps Made Easy, this was an easy choice for us.

Website Software – website software consists of web design applications and plug-ins to support website operation. For website design, we use WordPress which is a standard for professional websites.

The total cost of all the software is less than $500 per year that comes out to approximately $40 per month. For details on the software you need to run your business you can read our article Hardware and Software To Start Your Drone Business.

Insurance Costs

you will need a minimum of $1 million in liability insurance for most jobs, that is what we recommend. Currently, we use Skywatch which charges are they per hour basis. When you start your business this is the most cost-effective option. For a one-hour job, you can expect to pay between $12 and $30 depending on the location.

As you grow your business and get a larger number of contracts you will want to transition to standard yearly insurance service. We’ve been quoted $900 per year for $1 million in liability insurance.

Three Example Projects: Profit Analysis

Project #1

We found this customer by basically driving around different construction sites and handing out business cards to project managers. While, this is not terribly efficient we found it is a great way to advertise your business and meet potential customers. Turns out that this customer hired us to do some work that same day, and it turned into several follow on jobs at this site.

Drone Profit Analysis Project-1

Project #2

We found this customer by doing some pro bono work at a local construction site. We sent the results to the site manager to show him what we can do and the company decided to hire us to work on another project. This was a long-term contract but I’ll just consider one visit.

Project-2 Profit Analysis

Project #3

We found this job the old fashion way, cold calling. First, we sent emails to a local commercial developers, then followed up with phone calls. One guy got back to us and said he might have something in a few months, when we called a few months later they hired us.

Project-2 Profit Analysis

So these three examples should give you a good sense of revenue versus profit versus hourly rate. The job with the highest revenue and highest profit also had the lowest rate.

Project Hourly Rate Summary
Project Revenue Profit Summary

For these three jobs are total profit was 848, but we still need to account for the upfront cost of our drones, so we’re still a long way from being profitable.

As a results of this analysis we made two changes to our pricing structure

1. Increased price for video services to increase the hourly rate

2. Added a travel fee for jobs outside a certain radius.

This is the type of analysis you need to do to determine if or when your business is profitable.

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Felton Flood, PhD

Felton Flood, PhD

Dr. Flood has 25+ years experience in telecommunications and is a veteran of several startups in Silicon Valley and Northern Virginia. In 2021 he co-founded Lightwave Aerial, applying machine learning and cloud technologies to innovate UAV services.

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