Two-pilot drone division model, 61% billable hours, tell me what's wrong with it

75 minutes edit on a $600 land package is fantasy. I've paid for that work and the deliverable is a two minute cut with music, color and usually a couple of rounds of the agent asking for a different opening shot. Revisions aren't in your model at all. Add 30 minutes average across everything and your ceiling falls from 2.4 to 2.1 before you even apply the 61%.

The $45,000 sales and admin allocation is where I'd start. 730 projects a year means someone is booking roughly three jobs a day, chasing invoices and handling the calls where the agent moved the shoot. That's a person, and a person is more than $45,000 loaded. If the pilots are doing their own booking, your 61% is already too high because scheduling time isn't in the 3 hours 20.

Your land number might be low rather than high, which is the opposite problem. Aerial on a 40 acre parcel is doing work no ground photo can do, and the sellers of those parcels are less price sensitive than a listing agent on a tract house. What I'd want to see is whether their land work includes any mapping deliverable, orthomosaics or a boundary overlay, because that gets billed on a different scale and it doesn't depend on a listing existing at all. If the $600 is pretty video only, they're leaving the harder-to-copy work on the table.

What does the minority position actually get you? 29% operating margin on $310,000 is $90,000 and if you're in for 25% that's $22,500 of income against a business with two employees who can each walk out with the certificate in their pocket and the client relationships in their phone. I'd want to understand key person risk before I argue about edit minutes.

@meridian's point is the one I'd underline. I've watched small service outfits break exactly there.

@ledger, on your numbers, two aircraft on a two year cycle at $18,000 a year total seems light once you count crashes. Not if, when. Ask them how many aircraft they've lost and to what.

Slow question. Where does the 730 projects of demand come from? You've modeled the supply side in detail and the demand side is one blended price. How many active clients do they have now, what's the top client as a share of revenue, and how many projects did they actually do last year? If last year was 400 you're not modeling their business, you're modeling a growth plan.

Something here isn't adding up for me. Why would drive time be 40 minutes each way as an average? Wouldn't they cluster the shoots in one part of the metro on one day?

They would try, @juniper, and it partly works. The limit is that agents schedule around the seller and the light, so you get a 9am on one side of town and a 3pm on the other and you eat the crossing. Clustering also fights against the high-value jobs, because the commercial and land work is usually further out.

@ledger, the diligence item I'd add is the airspace question you raised. Get the last 12 months of authorization requests and the denials or delays. In a metro with two airports, a meaningful share of the addresses will sit in blocks with a low or zero ceiling and each of those either becomes a slow manual request or a job you turn down. That is a real, countable number and it goes straight into your 61%.

Strip the model back. Revenue is roughly listings times attach rate times price. If listing volume in that metro drops 20% next year, what happens to the whole thing? That's the question, and everything about edit minutes is a rounding error next to it.

@verity is right that volume is the swing, and I'd add price. I get cold emails from people with a consumer drone offering listing aerials for $99. They're often not certified and I don't use them, plenty of agents don't ask. That floor exists and it pulls on the $250 tier constantly. The $600 and $1,800 work is safer because the client is a developer or a broker who wants a certificate on file and an insurance cert. So I'd model the $250 tier as declining price and hold the rest, rather than blending them into one $425 that hides the split.

Different world out here but worth saying. In rural counties the aerial is the only thing that shows a buyer what the property is, and there are maybe two certified people within an hour. Prices hold better than in a metro because nobody's undercutting. Smaller volume, obviously. If your operators ever look at expanding, the ring outside the metro may be better ground than another pilot in it.