How to Start a Childcare Business (Daycare) in India

Introduction to how to start a childcare business

Starting a childcare business can be a great business opportunity for aspiring entrepreneurs who love children. If you’re starting childcare business at home, the startup costs and risks are low when compared to other businesses.

There are many things to consider when deciding to open a childcare center. First and foremost, you will need to have a thorough understanding of early childhood education. You will have children in your care that are in the stage of life where they are doing the most important cognitive development, and so it is your responsibility to provide them with a suitable environment to meet their needs.

A step-by-step guide to starting a childcare business

Daycare businesses are always in demand. Today the vast majority of parents work full-time in addition to raising their children. Parents utilize some form of child care as they struggle to balance the responsibilities of their jobs alongside being a parent. Childcare centers provide a valuable service to these parents.

This article will guide you on how to start a childcare business, and the process of starting a childcare business, and also the pros and cons of this business. Here are the steps to starting a daycare business of your own. Let’s get started!

Step 1: Business plan to start a childcare business

The very first step towards opening your childcare is thinking like a business, and a proven way to do so is by creating a business plan. You have a business idea and now it’s time to turn that idea into a plan.

Your business plan should include:

  • Executive summary
  • Overview of the company
  • Market analysis
  • Competitive analysis
  • Description of management and organization
  • Breakdown of your products and services
  • Marketing plan
  • Sales strategy
  • Request for funding
  • Financial projections
Business plan to start a childcare business.
Business plan to start a childcare business.

Step 2: Identify existing child-care businesses

Your next step should be to work out on who your potential competitors might be. If there are a variety of businesses in your area offering a particular sort of child care, it might be best for you to differentiate yourself by serving a requirement yet unmet in your community.

Step 3: Make a budget to start a childcare business in India

One of the most important things you can do when preparing to start a childcare business is to make a budget. Doing so will help you plan for the future of your business, and ensure that it has the opportunity to succeed based on the funding you have available to you. You should consider start-up expenses, annual expenses, and monthly operating expenses. When making your budget, consider the following types of expenditures:

  • Licensing, inspection, and insurance fees
  • Medical testing and clearance
  • Safety devices such as smoke alarms, fire extinguishers, carbon monoxide detectors, first-aid kits, child-proofing supplies, etc.
  • Equipment for your planned activities and food, toys
  • Wages for prospective employees
  • Advertising/legal/professional-service fees
  • Rent, mortgage, and utility fees

Step 4: Set up a location to start your childcare business

In general, there are two ways to run a child-care business. If you would like to care for a large number of children, your best choice is to start a center-based business. Those with children of their own—or who want to work from home—may want to think about a home-based, or family, child-care center. Whichever form you select, you’ll want to know the way to properly found out your business.

Decide whether you’ll operate a home-based or center-based child-care business.

Operating a center-based child care

Your home finding adequate space and the right location requires money, time, and thought. The cost of the center itself, especially for a location outside your home, is going to be one of your major start-up expenses if you want to build, buy, or rent space for your center.

Operating a center from your home

Operating a child care center from your home is less expensive. Many very successful child care centers are located within the homes of the providers.

The advantages of operating a child-care center from your home are:

  • Fewer expenses
  • Generally, it is convenient for the provider and the parents
  • Lower overhead
  • More flexible hours
  • Accessibility for the provider to his or her family

Step 5: Get a business checking account and credit card

Get a business credit card and a business checking account early on to help you keep your business expenses separate from your expenses when first starting a daycare.

It’s crucial to separate your personal and business expenses for many reasons, not the least of which is to reduce your burden come tax season. It is simply the professional way to conduct your business, too. Set yourself up for success now by signing up for a business credit card and opening a business bank account, and be diligent about using both solely for your daycare’s finances.

In case if you miss this: How to Start an Organic Egg Production Business.

Step 6: Business structure

There are many different ways to structure your childcare business from a legal standpoint. There may be different options based on your area, so check your government websites for information they provide on business structures.

For example, you may wish to open as a sole proprietorship, partnership, or incorporation. Each option has different pros and cons for liability, taxes, profits, and several other factors.

Name and branding

A great name can help your daycare stand out, which is why it’s important to put the effort at the beginning towards creating a great name and brand for your daycare business.

Try to think of a name that is clever and easy to remember, while at the same time tells people what your business is.

License requirement to start a childcare business in India

Depending on your location, it may be an option to run your home daycare with or without a license. Even still, If you are interested to license your home daycare, you can proceed.

Just think of it from the parent’s point of view: Your child is the most precious thing in the world. Would you be comfortable sending them to a random person’s house, or would you rather send them to a properly licensed child care center?

Parents will know that your business meets all of the standards established by your government, by licensing your home daycare. Doing so will also likely make you eligible for different funding and professional development opportunities, which can have a significant impact on the success of your business.

Step 7: Get insurance for your daycare business

Insurance is vitally important when starting a daycare business. You need property insurance to cover your daycare business equipment and liability coverage in case you are sued. As careful as you may be, accidents can happen — especially in child care. If they do, you will want to have a good insurance plan to ensure that you are covered. It is important to have adequate insurance protection for your business.

Daycare business insurance can cover essential things depending on what plan you choose:

  • Property
  • Crime
  • Business income
  • Liability
  • Equipment breakdown

When creating your budget, insurance may seem like an extra expense to cut down on, but it will be well worth the cost when compared to the alternative of going out of business


Generally, liability insurance will cover most injuries that may occur for a child care program. The insurance company will defend you if you are sued under such a policy. If the court decides that you are liable the company will pay the cost of the judgment up to the limits of the policy.


With less cost, you can buy accident insurance to supplement your family’s medical insurance if a child or employee is injured. Talk to an agent or broker before deciding on the coverage.

Step 8: Tax laws 

Depending on the type of legal structure you selected for your business, you will have to contend with differing tax obligations, including the forms you will use and the types of taxes you must pay.

As with choosing a legal structure for your daycare business, tax law is quite complex and you should strongly consider enlisting a tax specialist to ensure you are paying taxes properly and complying with applicable law.

Step 9: Purchase necessary equipment 

Daycare centers often need toys, furniture, and play equipment to provide a quality experience. Your exact purchases may vary based on your niche and target audience. But it’s always important to take safety into account and make sure items are approved for the exact age group you serve.

You will likely need the following equipment for starting a daycare business:

  • Child-sized furniture such as tables, chairs, desks, etc.
  • Arts and crafts materials like pencils, crayons, paper, safety scissors, etc.
  • Toys like games, puzzles, dolls, building blocks, etc.
  • Children’s books
  • Healthy, nutritious snacks/meals
  • Storage containers for personal belongings, hangers for coats, etc.

Step 10: Build a team

If you want your business to grow and become sustainable, you may need a team to help you with the daily operation of your facility. Come up with a list of qualities that you need for every new hire and stick to them, rather than attempting to save money by hiring inexperienced people. Be cautious, when choosing your team, as they will be always with the children in your care and, you will be responsible for their conduct on the job, as the employer.

Step 11: Marketing your business

Once you have the basics set up, it’s time to bring in actual customers to your daycare center. To get children enrolled at your home daycare, you will need to first put the word out. Marketing your daycare business can be a challenge that’s starting, but some tried and true strategies often work for daycare providers.

If you want to take your marketing to the next level, you can also advertise your daycare business online on Google and Facebook. You can focus on optimizing your small business website and online profiles for SEO.

Step 12: Growing your business

Once you’ve overcome the biggest challenge of getting up and running, at some point you may wish to take your business to the next level. After all, kids grow up fast, meaning that you’ll need to find new customers sooner than later.

Below are some of the many things you can do to further legitimize your child-care and attract new customers.


Earning accreditation means that your business meets a high level of standards for different aspects of child care such as education and safety.


Although many home daycares get enough enrollments through word of mouth, it can never hurt to create a website for your business.

Referral program

No matter how much advertising you do, nothing beats a recommendation from a trusted friend or family member for convincing a potential customer to choose your business.

Social media

Social media is a great way to connect with your existing and potential customers online. Create a Facebook or Instagram page for your business and begin sharing content.

Search engine optimization

When searching for daycares in your area, you want your business to appear in those results. A website is essential to be listed, but there are more ways to be found in search results.


You should begin advertising before your child-care business is going to start. If you have the funds, newspaper, radio, and television ads will probably give you the greatest exposure, but these advertising formats do not come cheaply.

These are the steps you need to follow to be a successful caretaker for your daycare business.

Pros and Cons of starting a childcare business

These are some pros and cons of starting a childcare business:

Pros of starting a daycare business
  • Your children will be socializing with other children
  • Form close bonds with the children and families in your care
  • You will be your boss
  • You can set how much you want to make
  • You call the hours you will be working
  • Household expenses become a tax write-off
  • You get a feeling of making a difference in another person’s life
Cons of starting a daycare business
  • Your children will not get your undivided attention
  • Having other people’s children in your home all day, it affects the entire family
  • The daycare kids will be occupied everybody’s space, including your bedroom
  • They will be making lots of noise
  • They may damage your toys, books, walls, furniture, lawn, etc.
  • The hours are very long, you are tied down to your home during the day
  • You do not have interaction with co-workers
  • Occasionally you will have to deal with late payments or late pick-ups

You may also check Organic Fruit Farming, Business Plan in India for Profits.


Please enter your comment!
Please enter your name here