Wondering how to start a drone rental business? You’ve come to the right place if you want to mainstream your passion for drones into a home-based rental business. The best part about starting a drone rental business is that you don’t have to be available on a set schedule to run it because, aside from customer phone calls and drone deliveries and pickups, you don’t have to be available all of the time. Furthermore, the initial investment required to start a drone rental business is relatively low. This step-by-step guide will assist you in learning more about this business venture and determining whether it is the right step for you as an entrepreneur.
1. Familiarize yourself with Drone Rental Industry
Since drones are always in demand, drone rental businesses provide vital services to a specific demographic. The drone rental businesses typically rent out a variety of drones. Businesses and Individuals, who do not want to spend a fortune on drones, rent the drones for short-term use. Since they will be only using the drone for just one day or a few weeks, this service completely makes sense. When a drone is rented, the rental company delivers it to the specified location and then returns it at the end of the rental period.
Businesses or Individuals don’t have to worry about purchasing a drone that they’ll only need temporarily. Drone rental businesses benefit from rental fees on their drones on a regular basis, allowing them to profit from their one-time drone purchases and possibly scale the business by purchasing more drones in the inevitable future.
Drone rental is a pretty fast-moving industry, especially as more individuals and businesses seek to test out the potential of aerial technology. Purchasing your first drone, or any drone for that matter is often a significant financial investment. Aside from the cost, it’s difficult to know which drone is best for you and your needs without spending a few hours flying it. Then there are businesses that require a specific type of drone for a specific job. Perhaps a DJI Inspire to follow a car during a film shoot, a Mavic Pro to fly indoors, or even crop-spraying drones for agricultural purposes. They don’t want to spend all of that money on a drone that will not be used on a regular basis.
The solution to both issues is self-evident: drone rental business. It’s a far better option than spending a small fortune on a drone that will quickly collect dust after the job is completed. It also ensures quality in a way that purchasing one of many low-cost drones may not. All in all, the drone rental business is a highly lucrative and growing industry. However, make sure you conduct market research before starting your entrepreneurial journey in this business venture.
How much does it cost to start a drone rental business?
You could start a drone rental business at a basic level for around $15,000 assuming you buy just one agricultural UAV spraying drone at $14,000 and budget $1000 for marketing and other expenses. An extra $5000 to $10,000 could get you a couple of DJI Mavic 2 Enterprise level Drones to add to your drone inventory. That being said, if you want to operate on a bigger scale and provide a variety of drones for rent, it will easily cost you around $45,000 to $50,000 to get started.
Keep in mind, if you want to go really cheap, you can buy as you grow. If you don’t mind a little hard work, drone rental is one of the best businesses to start and scale.
Is drone rental business profitable?
Yes, the drone rental business is massively profitable if you know what you are doing. If you have a great marketing strategy, you can easily create 6 figure revenue-generating business by renting drones. An agricultural UAV spraying drone will cost you around $14,000 and you can rent it for around $1200 per week. Think about it, you can make all your money back by just renting your drone for around 12 weeks.
Is drone rental business worth it?
Absolutely, starting a drone rental business is incredibly worth it. You can realistically buy just one high-quality drone and start your business journey from there. The best thing is you can even start a drone rental business by buying used drones. Furthermore, this business is highly scalable and you can reinvest a portion of profit back into the business and scale it to a million-dollar drone rental business in no time.
2. Plan your Drone Rental Business
In order to start a successful drone rental business, planning is critical. Let’s get into some of the key steps you will need to take while planning your drone rental business.
Choose a name for your drone rental business
Whether you want to start a drone rental business or a dumpster rental business, you must choose a name that reflects the values and beliefs of your business.
Keep in mind that the legal business name must comply with state naming rules in the states where you intend to operate your drone rental business; otherwise, the state may refuse to accept the documents filed to form or qualify the company. Even though you are not looking to register your business when just starting out, you should put consideration while choosing a name. Think about the scenario where your drone rental business suddenly takes off and you want to scale it by registering and trademarking the business name.
Shopify’s Business Name Generator is super useful while brainstorming brandable names for your drone rental business. Once you decide the name of your drone rental business, you need to perform three final checks.
- First, check your State’s business name database to see if your desired name for your drone rental business is available.
- Second, do a domain name search to check if your business name is available as yourbusinessname.com. If it is available go ahead and register the domain before anyone else gets it. BlueHost offers domain names free of cost if your purchase 1-year hosting package with them. You can use the tool below to see if the domain name is available.
- And lastly, do a federal search on the US Trademark Electronic Search System and make sure nobody has already trademarked your name.
If the name for your drone rental business is available you can choose to trademark it, but honestly – don’t bother about it right now. It is a lengthy process and will cost you around $600. I would rather spend the money and time on marketing and scaling your drone rental business.
Choose a drone rental business model
At the very least, you will need a solid business model to start a successful drone rental business. Don’t just get into the rental business because it sounds glamorous and people are making a lot of money in this sector.
Consider what your drone rental service’s USP (Unique Selling Proposition) will be. What inventive methods will you employ to attract customers to your rental business? What is your strategy for retaining existing customers?
There are hundreds of drone rental businesses online, and hundreds more are popping up every single day. The bad news is that 95 out of every 100 new drone rental businesses fail miserably. I’m not trying to scare you; I’m simply stating the cold facts. As a result, to ensure that your drone rental business does not fail, you must have a solid business model in place.
Also, keep in mind that you should be prepared to put in at least 50-90 hours per week on your new drone rental business, especially in the beginning when you will need to learn a lot of new things and will most likely be on your own.
Drone rental business plan
If you want to start a successful drone rental business, you will need a compelling business plan at a bare minimum. A well-written business plan should explain the company’s core objectives and how it plans to achieve them. One of the other purposes of a business plan is that it makes your drone rental business look professional and appealing to prospective lenders and investors.
All in all, a well-written actionable business plan is a crucial document for your drone rental business. Without it, you’d be running around in the darkness.
A compelling business plan has many sections, some of the must-includes are:
- Executive Summary
- Business Description
- Market Analysis
- Competitor Analysis
- Services to Offer
- Competitive Pricing Strategy
- Marketing Strategy
- Financial Projections
You can use business plan software like BizPlan and Enloop to compose a professional-looking business plan for your drone rental business. However, don’t get lazy and pay someone 10 bucks to write a business plan for your drone rental business. You will need professional high-quality work that comes from within you.
3. Register your Drone Rental Business
You will need to register your drone rental business in order to operate it as a legal entity. But before you register the drone rental business, you need to understand and choose a business structure for your drone rental business. You’ll want to choose that intelligently because how you establish your drone rental business will affect your taxes and legal responsibilities.
Consider one of the most frequent business structures:
a. Sole Proprietorship
This form of unincorporated business is owned by a single person or a married couple. Your business will not need to be registered, and your taxes will be reported on your personal tax return.
b. General Partnership
An unincorporated firm with numerous owners that, in terms of registration and taxes, is similar to a sole proprietorship.
c. Limited liability company (LLC)
A registered business that provides personal protection to all of its members in the event that your company gets sued. You can decide whether you want to be taxed as a partnership or as a corporation.
Incfile offers one of the best services when it comes to forming an LLC. Their pricing starts from just $0 + filing fees. And these costs are often tax-deductible.
This is a sort of incorporated business, with S-corporations and C-corporations being the most popular. The taxes you pay will differ based on the sort of corporation you form.
4. Register for Taxes and Obtain an EIN
As a responsible business owner, you must adhere to the law at all times. That is to say, you must follow all tax, licensing, and employment regulations. Investing the effort to learn about any legal regulations that may apply to your drone rental business may save you a lot of time, money, and stress down the road. What business taxes you must pay and how you must file will be determined by the business entity you choose, as well as other features of your drone rental business. It’s a good idea to speak with a tax professional right now to be sure you’re on the proper track.
If your drone rental business relies on employees, you’ll need an employer identification number. This is also referred to as an EIN or a business tax ID number. You can obtain your EIN online from the IRS for absolutely free and use it when filing taxes for your done rental business. It will also be required if you open a business bank account, obtain a business credit card, or apply for a business loan. Even if you don’t intend to hire employees, there are numerous advantages to obtaining an EIN.
5. Get Funding for your Drone Rental Business
Your business will collapse if you don’t have enough money, even if you have a top-secret drone rental business service strategy that can win the hearts of people from miles away. It sounds really funny but you must first have money in order to make money. There is no getting away from the fact that buying drones is expensive. Well, if it was not expensive everyone would be buying one and the scope of the drone rental business would not be there after all. Not to mention the fact that you may be paying high rent, marketing your service, and hiring employees with salaries and perks.
Numerous incentives, subsidies, loans, and equity investments are available to small enterprises like drone rental businesses. Regardless of the funding source you choose, you must have the following documents (at a bare minimum):
- A Drone Rental Business Plan
- Projected Financial Statements
- Tax returns of both the business owner and the business itself (when available)
- An explanatory document on how the money will be used
- A description of services offered by your drone rental business
After you’ve done the maths and figured out how much money you’ll need for your drone rental business, you may look into the following choices.
Obtain Funds through SBA Backed Lenders
You can qualify for an SBA loan even if you have little to no money and want to start a drone rental business. The Small Business Administration (SBA) of the United States collaborates with lenders to give loans to small businesses around the country.
One thing to remember is that the agency does not lend money to small business owners directly. Rather, it creates protocols for its lending partners, community development organizations, and micro-lending institutions.
SBA-guaranteed loans come with a slew of advantages. The rates and costs on these loans are often comparable to those on non-guaranteed loans. Additionally, SBA-backed loans come with ongoing support to assist you in starting and running your drone rental business. Furthermore, certain SBA loans have lower down payments, more flexible overhead restrictions, and no collateral requirements.
Let’s get familiar with three of the most popular SBA loans.
- 7(a) Loans: This type of loan guarantees a portion of the total amount, cap interest rates, and limit fees.
- 504 Loans: These types of loans provide long-term, fixed-rate financing to purchase assets for your drone rental business.
- Micro-Loans: These are the loans that provide $50,000 or less to help small businesses start up and grow.
Now that you understand the whole SBA lending process, it’s time to know some of the most popular SBA-backed lenders in the USA to fund your drone rental business:
- US Bank
- Wells Fargo
- United Midwest Savings Bank
- Live Oak
- MidFirst Bank
Obtain Funds through Banks
If you can’t get financing for your drone rental business through state-level agencies or SBA-backed loans, your next option is trying for traditional small business loans through banks. Therefore, you need to perform your due diligence and know exactly how the lenders assess your drone rental business, you might be able to get approved for a conventional loan with a better term and a higher loan amount.
Obtain Funds through P2P Lenders
The term “Peer to Peer” refers to a sort of financing that is very similar to crowdfunding, with the exception that your drone rental business loan application is vetted and presented to numerous lenders and investors.
If traditional lenders have turned down your drone rental business loan application, this sort of funding is a perfect alternative. Some of the well-known peer-to-peer lending companies are:
6. Promote your Drone Rental Business
Most business owners, for some reason, do not include marketing in their business strategy. This is likely one of the most serious mistakes you can make, and you should avoid it at all costs. For a service-oriented business like a drone rental business, marketing, and advertising make or break your business. Furthermore, if you do not have a large sum of money to invest right away, you must understand what it takes to successfully promote a drone rental business. You’ll also need a solid marketing strategy and communication strategies in place.
Let’s go over some of the traditional and modern marketing strategies you can use to promote your drone rental business.
Build a website
I can’t stress this point enough. You will NEED a website in order to operate your drone rental business. There is no way around it. The world has become digital and you must create a digital presence for your drone rental business.
Make sure to utilize the power of the internet. Additionally, you must customize your drone rental website and make it align with your brand. You can put pictures of your drones plus testimonials and make an excellent impression on your visitors. After all, actions speak louder than words.
Don’t forget to include your mission statement on your drone rental website and let your customers know why they should rent from you. Having a website creates a digital presence for your drone rental business so your potential customers can search and find you on the web.
You can read my guide on how to make a basic website for your small business if you want to do it yourself. However, if you want someone else to work on the technicalities while you focus on acquiring more customers for your drone rental business, we are ready to help you. Our $499 digital package comes with a professionally designed website, custom email, 24/7 support and maintenance, SEO, and digital marketing services. You wouldn’t want to miss the deal. Contact us today before the deal runs out.
Establish social media accounts
Create a digital presence for your drone rental business by establishing social media accounts. You must be strategic in this regard, as you do not want to waste your time appearing on all social networks, particularly those that do not align well with your target audience.
You want your drone rental business to be on, depending on the size of your operation:
Nowadays, almost everyone uses social media not only to communicate with friends and family but also to shop for goods and services. Getting your drone rental business in front of your target audience can result in more leads and sales. Moreover, it can also be used to keep current customers informed and to attract new customers.
Run Paid Ads
Paid Ads have the ability to target prospective customers within a specific demographic and region, making them an excellent tool for your drone rental business. Consider running paid ads through services like Facebook Ads, Yelp, or Google AdWords. Furthermore, the best thing about paid advertisements is that they produce results quickly, allowing you to scale your drone rental business both vertically and horizontally.
If you need any professional help to run paid ads for your drone rental business, please contact us. We will be more than happy to provide you with help and resources for absolutely free.