So you want to start a UAV business…

moneyLooking back over the last couple years, and more recently the last few weeks with numerous discussions on new regulations, there are a number of things that have come up in regards to the ins and outs and issues of being a commercial UAV operator in Canada. This is a new and quickly evolving industry and as such is face paced and fast moving, and is a lot like the early days of the dot-com boom or the Klondike gold rush of old. Lots of people are excited by the technology and the dreams of getting rich off their hobby.  However like those two examples there is also the harsh reality that not everyone is going to strike it rich, and for many it will be a tough lesson.

Starting any business has challenges and risk at the best of times, jumping into a new emerging market makes those challenges even greater, as there is not a lot of existing knowledge and experience to guide you forward.  Even the most successful operators to date are learning as they go, and every day offers new challenges that have no off the shelf solutions. There is a lot of flying by the seat of your pants.

The lure of turning a hobby into a business can enticing.  What could be better than doing something you love and getting paid to do it?  The problem is that doing something for fun on your own schedule is much different than doing it on a client’s schedule.  The demands of meeting expectations can quickly suck all the fun out, and you may be left with a hobby you don’t even enjoy. So its important to keep that in mind before making the leap.  Is this truly something you want to do every day for others? 

As with any business venture, planning and research is key, and it wont all be handed to you on a silver platter.  You need to take the time to properly research the realities of the business on your own. While some peers in the industry will offer up advice (as we at flitelab have been doing via this blog) many wont be willing to shared their knowledge on all aspects, and many truly don’t have all the answers themselves.  So the best piece of advice is to do the legwork BEFORE jumping in with both feet. if your not willing to invest this time you truly are not ready to run a business.

If this is your first time running running your own business you will also have the challenges of those aspects on top of the UAV specific issues.  There is more to running a UAV business than doing the flights and collecting payment. Take the time to get some assistance on general business setup and operations before focusing on the UAV specific elements.  Try and find a mentor that can assist you with the day to day questions that come up.  Seek assistance from local business groups, networks, and government agencies.  There is a lot of free or cheap information out there that can help get a solid business structure together for you (The Business Development Bank of Canada has some great resources available for free). A solid organized business will go a long way to building a solid foundation to build the UAV specific items around.  The more organized you can make the operation the less time will be lost of the smaller things.  Take into account what sort of business structure you want (sole proprietorship, partnership, incorporation, etc), all have pros and cons in terms of cost, liability, taxes, and paperwork.

A small business is a 24/7/365 undertaking, be prepared to devote the time it needs.  It’s not like working for someone else where your weekends are free and you get vacation, it is a lifestyle commitment in many ways that offers many opportunities but demands a lot as well and entrepreneurship is not for everyone.

If this is will be your full-time job there is the pressure of making a living as well.  You need to not only buy gear and cover the day to day business expenses, but you also have to pay yourself so you can survive.  So factor in if and how you can support yourself as well as the business activities, especially in the early stages where jobs may be few and far between.  Consider starting it part time to test the waters before jumping in with both feet.

Develop a realistic business plan, it doesn’t need to be super detailed to start, but make an effort to honestly assess all the costs and possible revenue the business will have.  Don’t get sucked into just assuming you will make money and masking the reality with the fun of using the technology.  You have to take a real look at it and if the numbers don’t add up then it truly isn’t a business.  Don’t let your excitement and dreams cloud the reality.

There will be red tape, all businesses have red tape.  You need to review the regulations and requirements of operating commercial UAVs. Transport Canada isn’t concerned with everyone making money off UAVs, they are there to regulate primarily for safety of the public airways. Research the requirements and detail what you will need to do to meet them.  Don’t get frustrated and try and take shortcuts trying to fight the system, you’ll spend more energy and make no progress trying to fight the red tape than working with it.  Also research any provincial or local laws as well that may impact where you can fly and also your business operation in general.  The onus is on you as a business to know what is needed and make sure your fully legal and complaint. It will be a complex and often tiring and frustrating process, but a necessary one and a reality of running a business.

Don’t forget the insurance.  This will be one of the biggest operating expenses that you have outside of your equipment and one that cannot be recouped if the business fails.  Make sure you fully understand the coverage and specifics of the policy to ensure it covers your needs.  You may also need a specific level of coverage, above your initial amount, to work for some clients, so factor in the possible added expense if you need to add more down the road to win a job.

Be professional, this is a service industry and you are only as good as your last job.  Most markets in Canada are regionally fairly small and news travels fast, both good and bad.  Put your best foot forward from the start to develop your reputation within the industry.  Some clients will be frustrating to deal with but it is all part of the business.  How you handle the tough clients will be more important than how you handle the good ones. The more business you can gain by referrals and word of the mouth means the less time and money you need to invest in marketing and sales, so it can have a huge plus to the overall business by developing a good reputation.

Ask yourself some serious questions and find the answers before you begin:

  • Do you have the start-up capital to get the business going? If not where and how will you get it?
  • What equipment do you have and what more will be needed to start?
  • What is the potential client base?  How will you market to them?
  • What competition is already in your area?  How will you compete, on price, quality, a unique offering?
  • What is your core service offering? Photos, video, agriculture, GIS?  (Don’t try and be all things and be mediocre at all and great at none).
  • Will the aerial services be enough to keep you busy and profitable?  What other services do you plan to offer to make up the shortfall?
  • What will you do during slow times of the year (ex: over winter) to keep the business running?
  • Will you need an office space and what will it cost?
  • What additional training might you need and what will it cost?
  • How big a team will you need to assist your work and what will they cost? (Regulations may dictate this cannot be a one man operation for example).
  • How much will you invest back into the business for upgrading gear and for emergencies?
  • How much are you willing to lose IF it all fails and what is Plan B?

This article isn’t meant to discourage, although it may seem a bit on the negative side, but meant to be a dose of reality.  It is easy to get caught-up in hopes and dreams and put on blinders to all the details that can work against you.  Step back and honestly access what you want to do and base your decision on facts. Better to spend some time upfront than get surprised 6 months and thousands of dollars into the process.

Flying is a small portion of what it takes to run a UAV business, and in many ways is one of the easier aspects.  Look at it realistically and with proper planning and you will have a far more successful and enjoyable time than running in head first with your eyes closed. The sky is the limit but there will be turbulence along the way, a good pilot prepares for it.

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