We’ve talked before about how Southwest Airlines keeps its planes in the air (and how this makes money for Southwest). The lesson for us is: the longer you keep the drone in the air, the more money you make.
Today we are building on that lesson with a little something for those finance freaks out there: Asset Utilization.
Asset Utilization means: “a ratio that measures how efficient an organization is in using the assets at its disposal to make money and turn a profit.”
As with most formal definitions, that isn’t very useful. So let’s use an example from the manufacturing sector.
If I have a machine that costs $10,000 and in a day it can produce 10,000 widgets that each sell for $10 (so $100,000 in revenue), then the “Asset Utilization” ratio would be 10:1 ($100,000 divided by $10,000 for the machine, aka, the “Asset” that is being utilized).
But if the machine costs $20,000 and produces 5,000 less widgets in a day (so revenues are $50,000, i.e., 5,000 widgets produced at $10 per widget), then the Asset Utilization ratio is 2.5:1. And for those of you who struggle with math, that means the cost is quadruple for my widgets – and that means I am a loser.
How can this be applied to drones? Well, we need to adjust Asset Utilization concept a bit to something we call Cost-Per-(Flight)-Minute (CPM). Similar to Asset Utilization, CPM measures the efficiency of your drone. However, instead of by revenue it is from a cost perspective, i.e., how much does each minute cost you? Which, in turn, directly impacts your profitability.
Suppose your drone costs $20,000 but can only fly for 15 minutes. It’s CPM is $1333 per minute. But suppose your drone costs $6,000 but can fly for 120 minutes. That drone’s CPM is $50 per minute. Or, another way of putting it, the more you “utilize” the asset and the less the asset costs, the more profitable you will be.
Just a coincidence, but it happens that the Quad Configuration of the Modovolo Lift is $6,000…and can fly more than 120 minutes…and has a CPM of $50 per minute.
You can pre-order your Modovolo Lift here. Only 200 pre-orders available.
