How to start a daycare business in India - Explore Complete Guide

Here is a guide to help you formulate a proper market plan for setting up a daycare business.
Business Loan
2 min read
22 April 2025

Over time, the structure of Indian households has changed considerably. 1 in every 3 Indians belong to a nuclear family, and single mothers run 5.4% of households. While inviting grandparents and hiring a nanny to look after children is common in India, more parents are opting for daycare centres.

If you want to start a daycare business of your own, check out this detailed guide.

What is a Daycare?

A daycare or childcare home is a place where parents can leave their children while they are at work. They drop them off before work and pick them up once their day is over. The person running the daycare takes care of the children, keeps them busy with fun activities, and helps them learn small things.

These services usually include giving the children healthy food, making sure they get enough rest, and keeping them happy. Many people start this kind of daycare at home, so children feel more comfortable—like they’re in a home, not a school. The space is often redecorated with bright colours, toys, and cartoon characters to make it more child-friendly.

Types of Daycare Business Plan in India

In India, there are mainly two types of daycare business plans – in-home daycare and independent daycare centres.

An independent daycare centre is a separate place made just for taking care of children, like a small school or playgroup.

In-home daycare means someone comes to your house to look after your baby for a few hours each day, or sometimes they stay full-time to help around the clock.

6 steps to start your daycare business in India

Step 1: Research the market

As a preliminary measure, analyse the market to know what it takes to start a venture from scratch. The findings from this exercise will provide you with a foundation for creating a sound business plan, which is the next step. As part of your research, make a list of the legal and financial requirements of opening a daycare centre. Then, study your competitors to learn what they offer and do not, based on which you can include unique services to set you apart.

Step 2: Draw up a daycare business plan

Once you have an idea about the daycare market in the country, draft a daycare business plan. Consider the age group of children that you want to cater to, your working hours, your services, and your location.

Based on this, determine your niche and optimise your plan accordingly. Then, calculate the associated expenses and revenues to decide if the project is financially viable and make appropriate changes.

Additional read: Why every SME needs a solid financial plan.

Step 3: Arrange capital

Once you draft a business plan, calculate the funds required to establish and run a daycare business in India. Consider the costs involved in getting a licence, renting a space, hiring staff, and paying for utilities as you determine the expenses. Scout for funding options and pick the one that matches your needs. To finance your daycare business conveniently, avail of a business loan from a reputed lender like Bajaj Finance.

Get a high-value sanction up to Rs. 80 lakh in just 48 hours, post approval. All you have to do is meet simple eligibility criteria and submit minimal documentation. To enjoy greater flexibility with withdrawal and repayment, choose the Flexi Loan facility. Then you can make multiple withdrawals based on your needs and prepay the same at zero extra charges.

Step 4: Enrol for childcare training

Qualification in early childhood care or child development is a bonus when establishing a daycare business. This will establish confidence in the licensing authorities and parents alike. Your certificates will deem you fit to start a business and look after the children entrusted under your care.

You may take up a diploma or a crash course to supplement your knowledge and skills. It would be better to ensure that your staff has the adequate skills to tend to the wellbeing of the children.

Step 5: Search for a good location

As you prepare your team with the necessary skills, look for a suitable location to set up shop. When selecting a location, keep in mind the children’s safety and hygiene. Pick a spot that is away from traffic, is pollution-free and also easily accessible. Consider premises with competitive rent to minimise your total expenses. If you have already got a location in sight but are short on funds, let us help! Apply for our business loan and secure quick funds easily.

Step 6: Get a licence or franchise

To start a daycare business, you must comply with basic requirements like minimum and maximum number of students and staff and hygiene standards. Once you are ready, apply for a licence with the relevant authority. They may want to see your daycare proposal before going ahead, so keep your daycare business plan prepared. Alternatively, you can also apply for a franchise with a well-known brand to build upon the trust earned by the parent company.

As you prepare to launch, check your business loan eligibility to explore funding options that can support setup costs, staff hiring, and other initial expenses. Alternatively, you can also apply for a franchise with a well-known brand to build upon the trust earned by the parent company.

What are the advantages of starting a daycare business?

Starting your own daycare business can be beneficial in many ways. First, there’s the personal happiness of building something of your own. Plus, spending time with children can be fun and teach you valuable life lessons.

If you’re still unsure about starting a daycare, here are some good reasons to consider it:

Emotionally fulfilling: Working with children helps you become more patient and appreciate the small joys of life. Also, having your own business gives you more freedom compared to a regular 9-to-5 job.

Control over your income: By running your own daycare, you decide how much you earn. You’re not dependent on a fixed salary and can invest your profits back into growing your business.

Look after your own child: If you have a child, you can care for them while running your daycare. It saves money and gives your child the chance to socialise with other kids.

New opportunities: Running a daycare can open doors to more work in the childcare field. You might get offers for other roles or choose to study further in this area.

Earn extra money: If you were planning to stay home to care for your own child anyway, why not earn some extra income by looking after a few more children at the same time?

Tax benefits: As a business owner, you can claim some expenses as business costs and save on taxes. These might include part of your rent (if you run the daycare from home), phone bills, transport, and childcare materials.

After setting up a daycare business, direct your sincere efforts towards improving your services based on parents’ feedback. It will help if you have a proper go-to-market plan with the relevant advertising for your business. To get your daycare business off the ground quickly, avail of a business loan with Bajaj Finance. Before applying, be sure to check your pre-approved offer.

Frequently asked questions 

What certifications do I need to open a daycare in India?

To open a daycare in India, you typically need certifications like first aid and CPR training, police verification for staff, and a trade licence from your local municipal corporation. Additionally, adhering to state-specific childcare guidelines and standards is crucial.

How much does it cost to start a daycare centre in India?

The cost of starting a daycare in India varies widely based on factors like location, facility size, amenities, and staff salaries. Generally, it can range from Rs. 2 lakh to several lakh, covering expenses like rent, interior setup, licensing fees, equipment, and operational costs.

Can you start a daycare from home?

Yes, you can definitely start a daycare from your own home, and it can even be a more budget-friendly option. This is because there are different government schemes at local and national levels that offer grants and support for home-based daycare services.

Is the daycare business suitable for the future in India?

The daycare industry in India is growing fast, with a yearly growth rate of about 9.57%. It is expected to reach a value of around INR 7,150 crore between 2021 and 2026. If you’re thinking about starting a childcare business, this is a great time.

Show More Show Less

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.