Daycare Business Plan, License, Permit, Cost to Start

Introduction to Daycare business plan: A Daycare center is mostly a commercial provider that offers care for a group of children. Services are delivered on a set schedule – often 6 am to 6 pm with food, activities, and other structured activities for a complete day. Babysitting actually means managing a few numbers of children, often on demand rather than a set schedule, and doesn’t include set activities. A Daycare business needs licensing of services and people. As a home-based childcare provider, without a license, it is possible to watch 1-2 children but later on, you must have a license. Rules for the license vary by state, please ensure to check it for your state.

Because of its nature, start by babysitting the maximum amount of kids you can before your state requires licensing. If, after 6 months to a year, you still enjoy the job, start to grow your business. The next step might be home-based, state-licensed childcare. Now, let us get into the details of the cost to start a Daycare business in India, license, and permission required to start a Daycare along with a Daycare business plan.

A guide to Daycare business plan, license, permit, cost to start

In the present times, the need for parents to earn a living is tremendous so you can see a market for your business and thereby a huge demand for the babysitting business. Here are some tips on how you can have this business and make money.

Nowadays it is not sufficient for both parents to earn and breadwinner. As a result, both parents are forced to work and earn for their living and basic needs in metropolitans especially.

On the other side, in many cases we see single parents striving hard and working for the family. This creates a demand for someone to babysit their kids because they have to use the daytime to generate money for a living. You may do this business alone or considering a full-time business appointing few people and own it. If you are planning for the second one, starting a babysitting business for the corporate way, then this post will aid you in most ways.

Licenses and permits required to start a Daycare business

Working with kids has many rules. Each state has several guidelines designed to protect children but those laws differ mostly from one state to another. Approach your appropriate state organization to know how to become licensed.

Firstly, you must attend an orientation. To be eligible, you should initially live in the place where you will deliver the care. You should make few home modifications, and submit to a background test as well as a child abuse index check and must have 15 hours of and safety and preventative health training classes. You must keep detailed records for each child, frequent home inspections for compliance, have fire safety provisions, and also must have a person with CPR certification along with you when kids are at your home.

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Daycare license.
Daycare license.

The licensed caregiver should be with children 80 percent of the time. In case needed, you can be replaced with an adult for child care for 20 percent of the time only. During the operation, smoking is not tolerated. After the orientation fee, you must pay an application fee that changes depending on the count of children you are planning to start the babysitting operation. Other miscellaneous fees could be charged.

Business plan for starting a Daycare business

Even though you are just planning to care for some children in your home, it’s a great idea to prepare a simple business plan. You must identify the costs associated with all the things including the operations and logistics in order to finalize the price for your service.

Rules and regulations for starting a Daycare business

It must be clearly informed to parents regarding the timings to drop and collect their or else you will be in a trouble, as some parents will be leaving children too early, and in some cases, they may not pick up till 7 or 8. You must also clarify if you will provide food or they have to give along with the children as charges for food will be inclusive in that case that will, in turn, add to the charges.

Insurance for Daycare business

Proper insurance to cover your Daycare business is very crucial. There is very little chance that your homeowner’s insurance covers you for liability or damages, accidents related to your childcare business. It is required to safeguard yourself and to comply with any state rules for home-based Daycare businesses with additional coverage. If you are interested to hire for your business then it is important to have staff compensation and unemployment insurance.

Laws and regulations in your state will vary but expect to dedicate some time learning about the major needs before start.

Daycare business

Be sure you have appropriate insurance to cover your Daycare business. Your homeowner’s insurance probably won’t cover you for accidents, liability, or damages related to your childcare business. So you’ll need to get additional coverage to protect yourself and to comply with any state rules for home-based Daycare businesses. If you’ll be hiring help, you may also need to get workers’ compensation and unemployment insurance.

Laws and regulations in your state will differ but expect to spend a considerable amount of time learning about the many requirements before opening your doors. Though there are many guidelines, startup costs are less still significant home modifications must be done.


Taking care of children is a tedious job that the government recognizes completely. Therefore, there are different licensing guidelines that govern the child care business. Basically, a local child care organization and the state’s child care licensing office will grant the needed approval for starting this Daycare business.

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The next thing one should analyze is the already present potential competitors. In this scenario, you must attract people to your business with some innovative and unique ideas. If somehow you could get the knowledge about the age group of staff and the working period of other Daycare business it can help you plan a scheme and succeed.


Government organizations and private institutions have already recognized the prominence of quality childcare, which made them allocate some funds from their side. Thus, it’s important to enquire as soon as possible and apply for available funds. Small business administration is another way which can allocate your loans. They even support counseling and guidance in order to help you stand confidently in your business.

Market your Daycare business

If you have done the aforementioned tasks, it is the perfect time to advertise your Daycare business. It is a vital segment for your Daycare business operation. It is excellent if you can market by conventional modes like posting posters and flyers on stores, etc. But using the Internet in the present times will escalate your business and attract a large number of clients for your babysitting business service.

The cost involved in starting a Daycare business

The cost of setting up a day depends on the size and capacity of it which you are going to maintain. The typical size of an onsite Daycare should be at least 2,500-3,500 sq. ft. It costs around Rs. 30-40 lakhs for starting a Daycare center for having at least 50 children.

Frequently asked questions about starting a Daycare business

The frequently asked questions for starting a Daycare business are listed below-

Is the Daycare business profitable to start?

Yes, the Daycare business is profitable but the location and few checkpoints are the most important ones to check.  Currently, this business is growing day by day as per the demands, because now a day in every family to meet the expenditure both mother and father are working.

How much it costs to build a Daycare approximately?

To build a complete sophisticated Daycare with all the amenities costs around Rs. 30-40 lakhs. This includes place, ambiance, fixed equipment, playground equipment, and other amenities.

How long does it take to open a Daycare?

It takes around 2-3 months to set up a Daycare as it requires few permissions and set-up in the place where you choose to start the business.

Can I open a Daycare without getting CPR certifications?

Many states allow opening a Daycare without any certificate but it is better to own a director who is having a CPR certification.

Can I start a free Daycare without any investments?

There are few childcare subsidies which can be applied but each state has different subsidies but the procedure is a long process.

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