There are few events in your professional life more rewarding than starting your own business. The ability to develop an idea into a blooming entity is a dream that many people share. Unlike some business activities that require a lot of capital or extensive training, drones offer everyone the opportunity to become their own boss.
I was fortunate enough to start several companies. Some were great successes while others were burned in a glory. Each was a priceless learning experience that led me to my career in the UAV industry. In 2017, I started my drone service business, Vigilante Drones, and in 2018, I started a nonprofit, Vigilante Cares, which uses drones to help veterans with post-traumatic stress disorder (PTSD). Over the years people have asked me how to start their own drone service companies.
After the last interview, I wrote down the ten steps that I believe are critical to starting a drone-based business. I hope they can help you find the same financial freedom and satisfaction that Vigilante Drones and Vigilante Cares have brought me.
But first …
First, let me say that I am not a lawyer or certified public accountant (CPA). There are risks in starting a business and I strongly encourage you to speak to legal and financial professionals for expert advice. Meet with these knowledgeable and trained individuals before telling your current boss that you’ve quit or before you take out a second mortgage to buy the $ 100,000 quadcopter you laid your heart on.
Although I would have to write a book to go into the details, in this article I will mention the big ticket articles for starting a drone service business. I encourage all readers to explore the free resources I mentioned for more in-depth advice. With those reservations out of the way, here are my ten steps to starting your own drone service operation.
1. Get certified (Part 107)
As commercial drone pilots, we require FAA remote pilot certification (Part 107) by law. If you want to make money from a drone, this is the first step. As you study the Aeronautical Knowledge Test (AKT) material, you will get an idea of whether or not you have sufficient interest in drones. To some, the material can seem very technical and therefore a bit dry at times. Responsible pilots always obey the rules and regulations of the FAA and other government agencies. Studying for the exam is your decision if you have what it takes to fly friendly skies while making money.
2. Market research
Drones are useful tools in a wide variety of industries. In this step, you need to determine which drone services your company will provide. To do this, you first need to understand your potential customers and your local market.
It seems like offering photography, thermal imaging, farming services, utility inspections, LiDAR, mapping, and more is the best answer to this question, but don’t bite off more than you can chew. Ask yourself what equipment you can actually afford and master. Then consider what kind of services your local market might use.
What is the demand for drone services in your area? What types of drone services are needed? How many potential customers are there? Where are your customers? What does the competitive landscape look like? What prices can you charge for your services?
The answers to these questions form the foundation of your drone business. They are the building blocks for the plan that you will put together in the next step.
3. Develop a plan
Your business plan is like a blueprint for success. It can be a long, formal document or it can take up less than a page. (Sometimes the short and sweet is better.) Amazon founder Jeff Bezos wrote the rough idea for Amazon.com on a paper napkin. Use the knowledge from your research to outline what your company will do and how it will do it.
Use your market research to help you decide what services to offer. This will also determine which drones, devices, and software you need. Decide what to charge for each service. For Vigilante Drones, I just started real estate photography with a DJI Phantom 4 Pro. I later offered additional services when I could afford more equipment and specialized training.
The Small Business Administration (sba.gov) is a great free resource for developing a plan. I strongly recommend trying them out. You will find some useful tools and templates to walk you through the whole process of starting a business.
Another organization to consider when creating your plan is the Service Corps of Retired Executives (SCORE.org). SCORE is a free resource that provides mentors to guide you on your small business journey. The advice of these seasoned professionals has helped me many times.
4. Decide on a business structure
There are many different structures for your drone business. Some options to choose from are: sole proprietorship, partnership, limited liability company (LLC), C Corporation, and S Corporation. For me, the structure that made the most sense for Vigilante Drones was an LLC.
The business structure you choose has a significant impact on the legal protection you have and how the money you make is taxed. For this reason, I recommend that you involve an attorney and a CPA in the discussion at this stage.
5. Make a financial plan
The financial part of your plan is your best chance at predicting the future. Here you take into account the costs of starting and running your business. What equipment do you need and how much does it cost? Do you pay for monthly insurance? Do you need an office to work in? What does the government ask you to do to run your business? Do you have employees?
Then, with a clear idea of the total cost, you must confirm that the amount you are making is covering the expenses and generating a profit. Be honest with yourself when projecting revenue. You are unlikely to open up to business and immediately start receiving tens of thousands of dollars a month. Use your research to make prudent and well-thought-out projections.
This is the time to decide how you will finance your business. Are you using your savings or do you need a loan? Can you borrow from family or friends? You have many options and you need to weigh them carefully.
Take some time to consider where your business will do its banking. Are you a sole trader using your personal bank accounts or do you need to set up separate accounts just for your business?
6. Decide on an accounting system
Nothing says more about the actual state of a company than a look at the books of accounts. If you plan to keep everything on sticky notes, you are likely facing an uphill battle. Whether you choose to record financial data yourself with spreadsheets or use off-the-shelf accounting software like Wave or TurboTax, choose one system and stick with it. You will be grateful, especially during the tax season.
7. Decide on a name and register it
I started Vigilante Drones when I lived in Montana. Montana’s story is tied to reports of vigilante justice. While this is rarely the case in practice, the romanticized version of the vigilante group is that it is someone who takes matters into their own hands to ensure that the results are just and fair.
There were almost no drones in the area where I lived. I wanted my company to be a just and fair provider of drone services and an ambassador for UAV technology in the region, so the vigilante became part of the company name.
Once you’ve decided on a name that feels right, make sure you register it. You can do this with your foreign minister and the federal government. While you are registering your company name, you can also obtain all the necessary permits and licenses your company needs.
It is important to check that the name you have chosen is not already in use. You can easily find out by doing a search to see if your name shows up as a website. For example, let’s say your initials are DJI and you think this would be a great name for your business. If you did a search, you would find that the web address and several related emails are already taken.
8. Select a business location
For most of us, the place we live is the place where our business is started. However, it might turn out that your market research takes you to a neighboring city. In some cases, you may even decide that moving remotely is best. Let the market tell you where your company has the best chance of success, and then go for it!
Remember, every state has its own laws and taxes. When I started my business in Montana, I benefited from a very tax-friendly state. When we moved our operations to California, we faced much higher taxes. The move was the right move, but I’d be lying if I said I didn’t miss out on Montana’s much lower fees and tax rates.
9. Get yourself and your team ready
Once set up, make sure you and your staff are ready to open the doors. Has all training been completed? Does everyone know what roles and responsibilities they have? Are your policies and procedures in place to ensure your flight operations are safe?
At this point in your endeavor, SCORE is an excellent resource for checking that you haven’t forgotten anything.
10. Promote your business
Once everything else is done, you need to let your customers know that you are open to business. Business cards, flyers, phone calls, email campaigns, or just stomping the sidewalk and going door to door will let people know about the services you offer.
When I started Vigilante Drones, I made some business cards and went door to door to offer my services to businesses and farmers. I made valuable contacts and landed more gigs with this method than with any other. Your market can be different. Experiment with different techniques to find out what works best. Remember that marketing is continuous. When you don’t have more work than you can handle, you have to keep looking for new customers or maintaining relationships with your existing customers.
Hope this brief overview of starting your own drone service business helps you get started on your entrepreneurial journey. The UAV industry is just taking off (pun intended) and we are only just beginning to realize the potential of drones. For all those brave people ready to start their own business, I hope the sun will always shine on you and your endeavors.
By David Daly