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Step-by-Step Guide to Start a Daycare Business in India

Interested in starting a daycare business? Here's a simple 5 steps guide that will explain the process on how to start a childcare business in india. Read More!

12 Jul,2024 06:21 IST 4419
Step-by-Step Guide to Start a Daycare Business in India

In Indian metro cities today, most parents are working professionals. In such a case, after the birth of a child, it becomes challenging to dedicate time to childcare while they have to work parallelly. Daycare for a child is a wildly common dilemma for parents as they want to ensure excellent care for their children without worrying while working. Daycare services in India have become a profitable business while providing ideal care to the children and peace of mind to the parents.

If you are a budding entrepreneur and want to start an in-demand and profitable business, you can start a childcare home in India. This blog will help you learn about the steps involved in ‘How to start a daycare at home in India’.

What Is A Daycare?

A daycare or childcare home is where the parents leave their children before going to work and pick them up after their workday has ended. The business owner ensures that the children are taken care of and, in the process, educates and engages them in fun activities.

Such services include looking after the children by ensuring a proper diet and sleep schedule. Furthermore, owners generally open such a childcare business at home to give children a homely feeling when they are not with their parents. The process includes redecorating the area to include child-friendly designs and characters.

How To Start Daycare At Home In India

Starting a daycare business at home includes numerous costs, the biggest being redecorating and promoting the business, making it vital to create a comprehensive daycare business plan. Here are the steps involved in starting a childcare business at home in India:

1. Market Research

Parents prefer the childcare business to be within the vicinity as they do not want to drop their children far from home. Hence, you must conduct extensive market research to determine if working parents in your neighbourhood are facing the same problem and looking for childcare services.

It will also help you identify their requirements for the services needed in that area. Once you know your neighbourhood has potential business prospects, you can move ahead with the business plan.

2. Location

There is a possibility that your neighbourhood doesn’t have enough working professionals with children willing to pay for such services. In such a case, you must scout for an ideal location with potential business prospects while executing market research. You can take a room for rent or redecorate an office space in an area that is easily accessible and child friendly.

3. Organise Funds

Starting a childcare business includes numerous expenses such as rent, redecorating, buying furniture, paying employees’ salaries, and more. However, you may not have enough funds to invest in the childcare business. Hence, it is wise to look towards taking an ideal business loan to raise adequate capital.
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You can take low-interest business loans from reliable lenders, such as IIFL Finance. However, you must choose a loan amount that does not create a financial burden during repayment.

4. Marketing and Advertising

You must market and advertise your childcare business as you may lose out on potential customers (parents) looking for such services to other childcare businesses.

You can market and advertise your business through various social media channels or by posting an advertisement in the newspapers. Marketing and advertising will help you spread the word about your new business and attract potential customers to cater to more children over time.

5. Obtain A License

One of the most critical steps in creating a comprehensive daycare business plan is to procure a daycare license in India. Every business must have a license issued by a relevant government authority to run operations legally. Ensure you register your business and obtain a valid license before starting the childcare business to avoid legal disputes.

Types Of Day Care Business Plan In India

Broadly speaking there are two types of Day Care Business plans in India - in-home day care and independent day care centres. As the names imply, an independent day care centre is a separate dedicated space which functions as a day care facility.On the other hand, the in-home day care involves a dedicated person visiting the home for certain number of hours to take care of the baby or even a dedicated 24/7 assistance

Cost of starting a day care business in India

The cost of starting a daycare centre in India can vary significantly depending upon multiple factors. The size, the location, and the amenities you choose will drastically impact the overall costs. The location plays a crucial role in determining the cost. Naturally, renting a place in a city will be more expensive than renting a place in a smaller town or suburban area. Even the amenities, such as indoor activity areas, furniture, playgrounds, educational materials, and so on, can add up to the overall costs. Then there’s the salaries of the staff and of course, the licensing fees and permit charges that need to be paid to the respective authorities.

Considering the factors mentioned above, the starting cost for a daycare in India can range anywhere from approximately Rs. 2 lakhs to several lakhs (potentially exceeding Rs 10 lakhs). This broad range reflects the diverse approaches to daycare operations in India.

How to get a licence to start a day care business in India

Getting a licence to start a day care business in India involves the following procedure

  • Doing a thorough research on local requirements Connecting with your local municipality for specific licenses needed.
  • Registering your business, once you have chosen your business structure 
  • Gathering documents like business registration, NOC from landlord, police verification & health certificates for staff, and a fire safety certificate.
  • Submitting the license application along with the required fees and charges
  • Once the application is submitted, there will be a facility inspection. 
  • You can expect a government visit to verify your daycare meets safety and child-to-staff ratio standards.
  • Upon successful inspection, you'll receive your official daycare license.

Avail Of An Ideal Business Loan For Starting A Childcare Business From IIFL Finance

Starting a childcare business in India requires creating a comprehensive daycare business plan, including effectively planning the fundraising process. IIFL Finance is India’s leading financial services company that provides comprehensive and customised business loans to fulfill your capital requirement.

IIFL Finance business loan offers instant funds up to Rs 30 lakh with a quick disbursal process. The loan for the business application process is entirely online with minimal paperwork. The loan’s interest rate is attractive and affordable to ensure the repayment doesn’t create a financial burden.


Q.1: Is the daycare business suitable for the future in India?
Ans. The Daycare market in India is projected to develop at a yearly growth rate of 9.57%. It is assumed to scale USD 957.86 million from 2021 to 2026. Check the guide above if you are seeking reasons to start a childcare business.

Q.2: Can I use the loan amount from IIFL Finance business loan to start a daycare business?
Ans: Yes. You can use the loan amount for any purpose, as long as it is related to a business. Hence, you can use the loan amount up to Rs 30 lakh to start a daycare business.

Q.3: What is the Interest rate on IIFL Finance business loans?
Ans: The interest rates on such business loans, which you can use to start a childcare business, start from 11.25%.

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