We earn commissions if you shop through the links below. Read more
Written by: Esther Strauss
Esther is a business strategist with over 20 years of experience as an entrepreneur, executive, educator, and management advisor.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 30, 2021
Investment range
$3,850 - $30,600
Revenue potential
$117,000 - $230,000 p.a.
Time to build
1 - 3 months
Profit potential
$58,000 - $82,000 p.a.
Industry trend
Growing
Commitment
Full-time
Here are the key factors to keep in mind when launching your drone business:
Since the commercial drone industry is only a handful of years old, analyzing and understanding the market is essential. First, let’s see what types of drone business opportunities are out there.
When analyzing an opportunity’s viability, it’s important to note both the positives and the negatives.
Here are some factors to be aware of in the drone industry:
The global commercial drone industry is poised for a strong growth and expected to expand further into segments such as delivery, agriculture, security, construction and real estate, mining, mapping, imaging, filmmaking and more. The general trend is growth and opportunity!
These are some of the trends shaping the drone industry:
Some challenges faced by the industry include:
If you start a drone business from home in a niche like photography, you could launch with as little as $8,000, or even less if you’re able to negotiate monthly payments for your insurance.
For someone looking to go all out in an advanced niche such as agriculture, you should expect to spend $100,000 or more. This estimate covers multiple advanced drones and the first month’s rent and wages for two employees.
On average, though, you should be prepared to spend $30,000 to start your drone business, with a basic office, one full-time employee, and two mid-range drones.
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | 175 |
| Business licenses and permits | $100 - $300 | 200 |
| Business cards and brochures | $200 - $300 | 250 |
| Drone | $1,000 - $20,000 | $10,500 |
| Software, supplies, and equipment | $1,000 - $4,000 | $2,500 |
| Training and certifications | $300 - $2,500 | $1,400 |
| Insurance | $100 - $300 | 200 |
| Website setup | $1,000 - $3,000 | 2000 |
| Total | $3,850 - $30,600 | $19,725 |
Naturally, a drone software company will have very different rates from a drone piloting company. So let’s break down an example from a pilot business.
Standard services for drone pilots are inspections, photography, and thermal imaging. How much you earn from your drone business will be determined by the sector you serve and how busy you are.
While most UAV pilots charge per project, the hourly rate equivalent is around $150 for real estate or $200 for oil & gas.
In your first year or two, you could work from home and generate 15 billable hours a week at an average of $150 per hour. This would mean $117,000 in annual revenue and more than $58,000 in profit, assuming a 50% margin. As your brand gains recognition, your billable hours could double to 30 a week. At this stage, you’d rent a commercial space and hire staff, reducing your profit margin to around 35%. With annual revenue of $230,000, you’d make a tidy profit of $82,000.
Before you jump into the drone business, some barriers can make entry difficult. While they aren’t impossible to pass, it’s good to be aware of them.
The first step to starting your drone business is to be FAA certified. You’ll need to pass the Part 107 test with a score of at least 70% to become a commercial drone pilot. The regulatory laws will depend on where you live, so make sure to research your local laws to determine whether starting a drone business is viable.
If you want to target large organizations with your skills, you’ll likely need experience. Pilot projects, for example, may require a certain number of flight hours or a safety record before a company may consider hiring you.
Now that you know all about the industry, it’s time to start thinking about the finer details of your business. First, we’ll start with choosing a niche.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Your competition is any business that targets the same market as you. Before you start your own business, it’s always a good idea to learn from those that have found some success in the industry.
Take some time to search for drone businesses in your niche and see what they have to offer, in terms of services and prices. Here are some questions you can ask yourself during the research process:
There are many niches that you can choose from as a drone business owner. Your niche will be the industry you specialize in and the service you provide. Start by determining the service you will provide. Here are your choices:
How much you charge will depend on your experience level, what your market deems fair value, and your competitors’ rates.
Before you decide on a price, you should estimate your break-even point. To do this, consider all your ongoing costs such as rent, utilities, insurance, and software. Once you have your number, divide it by your estimated billable hours per month. This number will be the point that you cannot go under for your services.
Next, you’ll need to add a reasonable profit margin so that you’re compensated for your efforts. An excellent place to start is with a 40% – 50% profit margin, but you can tailor this to your particular situation.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Identifying your target market is an integral part of business success. Within your chosen niche, there may be many different customers that can benefit from your services. But instead of targeting all of them, you should focus on a segment that you can serve best.
Let’s say you choose to focus on real estate photography. Will you orient your brand towards franchises and well-known brands, or would you prefer to work with independent agencies? Will you specialize in luxury or commercial real estate?
These are just a few of the questions you need to answer to find your target market.
Where your business is based will have an impact on your success. It’s always a good idea to have an office that’s close to your target market. But, if you’re starting your business from home, you’ll just have to ramp up your marketing and outreach efforts to get your name out there.
One more thing you may consider is your state’s drone regulations and service demands. If you’re in a state with stringent laws or low customer demand, you may need to relocate to make your drone business a reality.
You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Discover over 380 unique drone business name ideas here. If you want your business name to include specific keywords, you can also use our drone business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to drones.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your drone business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best options, other than friends and family, for funding a drone business. You might also try crowdfunding if you have an innovative concept.
Starting a drone business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your drone business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use these tools and software options: DarkSky, which provides hyperlocal weather info so you aren’t caught out in a sudden storm; Measure all-in-one solution for drone mapping, flight data, and program management; and DroneDeploy flight app that allows you to capture panoramas, photos, maps, and videos.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your drone business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your drone business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a drone business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in a drone business for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in drones. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a drone business would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Although the drone industry is new, it offers a wealth of possibilities, from agriculture to delivery, construction to surveillance, and more. Niching down helps to focus your services and business processes, leading to greater efficiency. It’ll also help you build your brand faster so you can take a slice of this fast growing market.
You did right by seeking guidance on how to start a business. With all the knowledge you just acquired, you’re ready to start droning and making good money! But you might want to bookmark this page just in case. Good luck!
Since every project is different, drone service providers usually charge on a per-project basis. But, to give you a rough idea, the average rate works out to around $150 per hour. This rate also varies depending on the industry you serve.
To become a certified drone pilot, you’ll need to obtain your FAA Remote Pilot Certificate. You’ll need to pass the test with a score of at least 70% and recertify every two years.
Before buying a drone, you should understand the different types, identify essential features, consider any additional accessories you might need, and familiarize yourself with the relevant regulations.
Certain sectors, like aerial photography and videography, real estate marketing, or inspection services, have shown profitable opportunities for drone businesses.
Operating a drone can vary in difficulty based on the model’s complexity, the flight’s purpose, and the operating environment. However, basic drone operation is generally straightforward and can be learned quickly, especially with user-friendly consumer drones available today.
Drone mapping can be a profitable venture, particularly in industries such as construction, agriculture, land surveying, or infrastructure inspection. Drone mapping offers benefits like cost and time efficiency, accuracy, and access to hard-to-reach areas.
Published on December 1, 2022
Can you tell the difference between Windows and Ubuntu? If you’re a self-professed technology geek with a business acumen, starting a techbusiness ...
Read Now
Published on July 29, 2022
In this digital age, businesses related to electronics hold great potential. So if you’re looking for a business opportunity, look no further than ...
Read Now
Published on June 20, 2022
If you’re considering starting a business, e-commerce seems like a natural choice, since more and more people are looking for goods and serviceson ...
Read Now
No thanks, I don't want to stay up to date on industry trends and news.
Comments