At RBS Drone Technologies, we see having a Commercial Drone Pilot’s License as an investment in yourself. It is a great first step to becoming an entrepreneur. Owning your own business and making money from it is about finding a service you can provide that people will pay for. You define your offerings, decide how much you will charge, and then plan ways to reach your target customer. And while you may think “everyone needs this!,” the more you can define who you serve, the better you will be in reaching them.
RBS Drone Technologies offers classroom and hands-on training to prepare people to pass their required FAA Part 107 Commercial Drone Pilots License Exam and to learn how to safely and competently pilot a drone. We serve the greater Chicagoland and Northwest Indiana with monthly scheduled trainings. For businesses with three or more employees to train, for example to have internal photography, inspection or other capabilities, we will come to you. (Learn more about training here.)
The information about the types of businesses and target customers would apply to anyone starting a drone business in the US. The information about the legal aspects of setting up a business includes some general information and some that is specific to Illinois. And, this is intended to be helpful and is not presented here as legal advice.
What kinds of businesses can you build with a Commercial Drone Pilots License?
As the owner of a drone and with your commercial drone pilots license, you can set up a variety of businesses. Drone photography and videography, surveillance (aka become a Private Eye), are just two examples. Soon (but not just yet) you may be able to contract with a Chamber of Commerce to provide deliveries for local businesses. You could specialize in inspections and offer your services to roof inspectors or insurance agencies and capture images of hard to reach areas. Think about what you enjoy doing, and then think about how a drone could be incorporated into what you do. Define it. Package it. Sell it.
Think About Who Will Buy Your Service.
As you think about what services you will provide, think about who your target customer is. For example, if you want to focus on “Event Photography,” your clients might be municipalities who plan community festivals, event or concert promoters. You could hire yourself out to established wedding photographers buy showcasing how video can add to what they already offer. As a Private Eye, you might have divorce lawyers as clients, or sub-contract yourself out to bigger surveillance companies. Marine companies could definitely benefit from a good drone pilot, to check on things in the water before sending out a person in a boat–saving time and promoting safety.
Ready to take the next step in starting your very own drone business? This guide to help you with putting up your very own drone business in the state of Illinois.
By the end of this post, you’ll have a clear picture of some of the things to be done to set up a successful drone business, particularly in Illinois.
Choose a legal structure: Sole proprietorship vs. LLC vs. S. Corp
The very first step in starting your own drone business is choosing the right legal structure. For this type of industry, most business owners choose to either start off as a sole proprietor, an LLC, or an S Corp. Here are some pros and cons of each type of legal business structure to consider as you decide what might work best for you.
Sole proprietorship: If you’re planning to run the business by yourself and are looking to start quickly, starting out as a sole proprietorship is the easiest and simplest way to begin. Having a sole proprietorship means that your business will be unincorporated and that you and your business will be taxed as one unit. The biggest advantage is the ease of starting and being able to have complete control of the business, while the biggest drawback is that as the business owner AND individual, you (and your personal capital, personal savings, etc.) will be legally accountable for all the debts and legal liabilities your business may be hit with.
LLC: With a Limited Liability Company, or LLC, your business will be taxed like a sole proprietorship, but it will come with the limited liability of a corporation. One great advantage of an LLC is that in the case that your business runs into debt or legal issues, you will not be held personally liable. One drawback though, is that you will not be able to pay yourself wages on this type of business structure.
S Corporation: The third most common entity to choose is an S Corporation, or S Corp. S Corps are regarded much like a corporation: It gives out stocks, you can give yourself a salary, and shareholders will be protected when it comes to the debts of the business. A drawback with setting up an S Corp may be time, as the process to form an S Corp can be complicated and conflict with your goals if you’re looking for a quick start. (Although there are many companies who focus on doing only this–you pay a set price and they take care of everything.)
Get a business bank account: Keeping business and personal expenses separate is important
Once your business is registered, the next step is to get a separate bank account where all revenue will come through. This step is extremely important even if you choose to run your business as a sole proprietorship because keeping your personal and business finances separate will ensure that you won’t have to manually figure out which expenses are personal and which are business-related in the event of an IRS audit where the burden of proof will be on you to prove the accuracy of your financial records.
Protect yourself: Get business insurance
While it is not legally required in the state of Illinois to get a General Liability insurance, as a new business owner, and especially one who will be working with people and technology, this is a good place to start. General Liability Insurance covers the most basic insurance needs of nearly every type of business which is why choosing this type of coverage first recommended.
Keep in mind though that it is legally required for small businesses in Illinois to get worker’s compensation insurance if you have at least one full- or part-time employee, and an auto liability insurance which will protect your business and drivers from third-party claims after a car accident. Be sure to check regulations for your own state if you are not in Illinois.
Play nice with Uncle Sam: Register your business and prepare to file taxes.
You will also need to register your business with the Illinois Department of Revenue Business Registration. To do that, you’ll need to get an Employer Identification Number (EIN) which is a nine digit number used by the IRS to keep track of all businesses (think of it as your business’ social security number). If you use a service to set up your S Corp, that should include applying to the IRS for your EIN.
As an independent contractor rendering services to different businesses, you will be receiving a 1099-MISC from your clients when you have received $600 or more from them during the previous tax year (and will need to send a 1099-MISC to contractors you pay more than $600). These forms will be used by the IRS to keep track of your revenue and to complete your own tax returns for the year.
Also, don’t forget that the revenue you receive will not have been taxed yet, so it’s crucial to set aside money to pay for quarterly estimated taxes or any other tax liability at the end of the year. With this in mind, it’s equally important to be sure your pricing is structured to account for taxes.
Back to the First Step: Train to Get Your Commercial Drone Pilots License.
We hope this information is helpful to get the ideas spinning in your head on ways to become an entrepreneur. Again, this is intended to be helpful. You should always consult your own lawyer before starting a business.
At RBS Drone Technologies, Inc., we are experts in preparing you to get your drone pilots license (and/or teaching you how to safely and expertly fly your drone once you have it. Contact us to learn how we can help you prepare for your pilot’s certification training so you can put your services out to the world.