Daycare Business plan-Start and Maintain a Successful Daycare Business

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As the landscape of the Indian family culture changes, the opportunities for businesses like daycare have increased, too. Not only do daycares provide a safe haven to kids who have working parents stuck in a tight routine, but they also provide developmental benefits. The staff at a daycare comprises counselors and teachers, who are well versed and experienced with the art of managing multiple children at once, and getting them to learn, eat, play, and work together.

Nuclear families, married couples, and single working moms have all increased in number in Indian homes over time. In actuality, one out of every three Indians is part of a nuclear family. While inviting grandparents and employing a nanny to care for infants is customary in India, parents are increasingly resorting to daycare centers, which offer a number of developmental advantages to the newborn.

Daycare facilities assist parents in balancing work and family life while also contributing to a child’s overall educational development. As a consequence, children grow more self-sufficient and are better prepared for school situations.

Daycare Industry in India

Daycare is definitely a growing industry, which even has more branches than one could think of. For example, kids diagnosed with mental illnesses like Autism or ADHD have a child and mental disability psychology specialists, along with the regular staff to ensure a smoother and better learning experience for differently-abled kids. This goes a long way in their overall growth and development.

Daycare in India is an open market, especially in metro cities. If you start off with a good quality of teachers and have appropriate counseling for parents and kids, then the business could take off faster than expectations. Of course, while this quality is possible to achieve from the get-go, it might not be that easy. Hence, the focus should be on starting small and going big.

Quality over quantity.

Is owning a daycare profitable?

As stated above, a lot of possibilities and new developments are available in India that will be extremely profitable if planned and executed neatly. Daycare will be enough to sustain itself for the long run and remain a reliable source of income with minor up-gradation costs on a regular basis.

Children ‘s amusement is a renowned and lucrative business. Bouncy castles, laser tag, and go-carts are all quite appealing and have a lot of business opportunities. If you’re more interested in developmental psychology, consider gymnastics, structured sports programmes, youth exercise, or after-school coaching. There are a number of other excellent choices.

Trends in the child care industry

Various trends in the child care business that most parents should be aware of are listed below:

  1. Daycare tends to understand and cater to budget-minded families, making it an easily accessible option
  2. A drop-in facility for children is a more viable and chosen option which is really more convenient and more of a school-like experience
  3. Daycares are more about safety and early education- A parent leaves a kid at a daycare with more expectations than just safety and passing time, which is that their ward will be educated and will learn to socialize, and will be surrounded by qualified people
  4. Technology is pivotal in the Parent-Provider relationship since most child cares live stream the classes and play areas for parents to watch and keep an eye on their kids throughout the day
  5. Corporations either already have or are considering opening their own day-cares or partnering up with such facilities for ease of their employees
  6. They cater to working-class parents who might have longer commutes and work hours, adding programs like ballet, karate, and music lessons for an additional price

Is the daycare industry growing?

In 2020, the Indian daycare market was worth US$ 3,480 million. The industry is expected to develop at a CAGR (Compound Annual Growth Rate) of roughly 12% between 2021 and 2026, according to IMARC Group. We’re constantly watching and assessing the pandemic’s immediate and secondary effects, bearing in view the uncertainty of COVID-19. As a prominent market participant, these observations are incorporated into the research.

Creating a Business Plan for your DayCare Business

Executive Summary

Your executive summary serves as an introduction to your childcare business plan, but it is usually the final piece you create because it summarises each of the plan’s major sections.

The purpose of your Executive Summary is to draw the reader in fast. Explain to them what kind of child care business you have and where you are in the process of growing it; for example, are you a startup, do you have a daycare that you want to expand, or do you run a chain of child care centers?

After that, give an outline of each of your plan’s future components. Give a quick summary of the childcare sector, for example. Talk about the sort of childcare you have. Include specific details about your immediate rivals.

Provide an overview of your target market. Give an overview of your marketing strategy. Determine who the most important individuals of your team are. Also, provide an outline of your financial strategy.

Company Analysis

You will outline the sort of childcare business you operate in your company analysis, as well as a business description.

For example, you must choose from the following types of childcare businesses:

House-Based Daycare: This sort of daycare is run out of your home and usually employs one or two caregivers. A daycare center is a child care facility that is located in a commercial structure. It usually includes numerous teachers and workers and may care for a large number of children. Preschool Daycare is a type of daycare that caters mostly to preschoolers.

School-Age Daycare: a daycare that caters largely to school-aged children. In addition to describing the sort of child care you provide, the Company Analysis section should provide background information about the company.

Include responses to queries like:

When did you establish your childcare business, and why did you do so?

What achievements have you made thus far?

Milestones might include sales targets met, new program offers, and so forth. Your legal framework. Do you have an S-Corp status? An LLC? A one-person business? Describe your legal framework in this section.

Industry Analysis

You must include an overview of the daycare business in your industry analysis.

While it may appear to be excessive, it serves numerous functions.

First, do some research on the childcare sector. It assists you in comprehending the market in which you operate.

Second, market research may help you enhance your approach, especially if it recognizes market trends. For example, if childcare with transportation is becoming more popular, it’s a good idea to make sure your plan allows for it.

Third, the purpose of conducting market research is to demonstrate to readers that you are an industry expert. You accomplish this by performing research and presenting it in your strategy.

In the industry study portion of your childcare business plan, you should answer the following questions:

  • What is the size of the childcare industry?
  • Is the stock market falling or rising? In the local or national market, who are your main competitors?
  • What are the current trends in the childcare industry?
  • What is the industry’s expected growth rate in the next 5–10 years?
  • What is the size of the relevant market?

That is, how big is your daycare’s potential market? You may estimate a figure like this by calculating the size of the national market and then applying that value to your local population.

Customer Analysis

The community you serve and/or plan to serve must be detailed in the customer analysis section.

Soccer moms, young families, baby boomers caring for grandchildren, and so on are examples of client segments.

Try to segment your target audience by demographic and psychographic characteristics. In terms of demographics, talk about the ages, genders, places, and income levels of the families you want to help. Because most daycares serve consumers in the same geographic region, demographic data is readily available on government websites.

Psychographic profiles reveal what your target families want and need. The better you understand and identify these demands, the more likely you are to attract and keep families.

Competitor Analysis

Your competitive analysis should identify your daycare business’s indirect and direct rivals, with an emphasis on the latter.

Other childcare providers in your area are direct rivals.

Indirect competitors are alternatives to direct rivals that parents have. This involves, among other things, keeping children at home and/or after-school programs.

You should describe the other daycares or child care facilities with whom you compete in terms of direct rivals. Your immediate competition will most likely be childcare centers located near your location.

Provide an overview of each competitor’s services and a list of their strengths and flaws. It will be tough to know everything about your competition unless you have previously worked in their daycare company.

However, you should be able to learn important details about them, such as:

  • What sorts of parents are they able to assist?
  • What kind of childcare services do they provide?
  • What are the hours of operation?
  • How much do they charge (premium, inexpensive, etc.)?
  • What do they excel at?
  • What flaws do they have?

Consider your replies to the last two questions from the perspective of the parents.

Management Team

A competent management team is necessary to demonstrate your daycare’s potential to succeed. Highlight the histories of your main players and teachers, stressing the talents and experiences that demonstrate their capacity to expand your child care business.

You and/or your team members should ideally have firsthand expertise in the daycare or childcare industry. If so, emphasize your knowledge and experience. However, you should emphasize any expertise or qualification that you believe will aid in the success of your childcare business.

Consider forming an advisory board if your team is inadequate. An advisory board would consist of 2 to 8 people who would serve as mentors for your childcare. Look for advisory board members who have worked in daycare facilities and/or have successfully operated a retail or small business.

Find a Name

Now that you have an actual grasp of what your business model is supposed to look like, have you already thought of a name? If not, this is the time to think up something simple, yet creative and catchy.

Requirements/ Equipments

You need to buy a substantial amount of baby-proofing and surveillance hardware, along with toys, learning instruments and materials, stationery, and other foundational tools before you open your center. While it is preferable to begin your company with all of these items, you can opt to expand later as your business grows.

If you will be providing a free/chargeable pick-and-drop service, then you would need to buy a van or a bus, depending on the signed-up candidates.

Target Demographic

Deciding this appropriately will help you understand who you want to sell to. Since your primary target is preteens, your advertisements need to aim at not just the kids but should showcase why your daycare is a viable option and should be chosen over other available facilities nearby to their parents.

Segmentation is a promotional technique that aims at identifying divisions within the primary demographic so that more personalized information may be delivered for relationship quality. Geographic region, gender identification, age, ethnicity, wealth, and amount of formal schooling can all be used to create subgroups.

Get Appropriate Licensing

Once you find a name and have a proper business model on paper, and finances acquired, it is time to pay close attention to the red tape, i.e., the legal side of a business.

  1. Business Incorporation- It’s time to pay serious consideration to the red tape, or the legal aspect of a business, once you’ve settled on a name and have a suitable business strategy on paper and funds in hand.
  2. Obtaining a Trademark Registration- To get legal standing and access various streams of funding, a business licence can be obtained through a single proprietorship, LLP registration, or the formation of a private limited company. In comparison to a private limited company, an LLP and a sole proprietorship require less compliances and other connected formalities. A registered trademark is by far the most important notion for any new firm because it protects the logo from duplication as well as other firms’ logos while also keeping client trust.
  3. Goods and Services Tax (GST) Identification Number- Starting a business necessitates the opening of a current account, and you must have a GST number in order to do so.

Here are a few examples of licensing hurdles you might face:

Physical space: depending on the child’s age, a certain amount of indoor and outdoor space is required for each child.

  1. Workers and/or children must have yearly medical checkups, as well as immunization certifications.
  2. Fire codes require a visible escape plan in each unit and regularly logged fire drills.
  3. Early Childhood Education certifications are necessary, as well as ongoing technical training for employees. The minimum prerequisites are an Early Childhood Education degree or even several years of childcare experience.

After a comprehensive review of the conditions necessary, you may decide to schedule an appointment with a licensing specialist to pose questions and go over the licensing procedure (if you need one). It might be advantageous for them to visit your home or center.

An Agreement

Once you’ve worked out the specifics, prepare a document that spells out exactly what you’ll deliver (and even what you won’t), as well as your customers’ requirements. To get you going, consider the following questions:

  1. What is the deadline for parents to pick up their children?
  2. Is there a penalty for being late?
  3. What facilities will you offer, and what are the responsibilities of parents? (For example, you’ll furnish formula, but they’ll supply diapers.)
  4. What policies do you have in place for ill kids?
  5. How many days off are you planning to take? Are all those days remunerated?
  6. What plan do you have in place to deal with delayed payment?

There are various internet resources available to assist you in drafting your own child care contracts. A daycare lawyer, on the other hand, can help you with the specifics of your agreement.

Get Business Insurance

For your business to operate securely, you’ll need insurance, just like you’ll need licenses and permits. Business insurance helps protect your company’s financial well-being in the event of a covered loss.

There is a range of insurance policies created for different types of businesses with different risks. Start with General Indemnity Coverage if you’re not sure what kinds of risks your firm might encounter. It’s a smart place to start because this is the most common sort of coverage required by small businesses.

Finance Analysis

Your available capital and your ability to invest more by acquiring more funds from various sources, like bank loans, money from family or friends, or business partnerships will define the size of your business, how long and far your product will reach, and the various requirements of a business in this segment.

Make sure you have a significant amount set aside to work on your marketing and social media advertising since these are key components of any well-functioning start-up.

The use of authorized company credit and debit accounts is required for effective asset security. When your personal and business accounts are linked, your financial assets (such as your home, car, and other belongings) are at risk if your business is sued. Incorporation law is known as piercing the corporate veil.

Understanding how to build company credibility can also help you secure credit cards and other funding in your company’s name (rather than your own), cut interest rates, and boost credit limits, among other things.

Social Media Platform for Childcare Centres

In the present economy, having a solid online presence is basic, particularly for smaller firms. It’s gotten truly easy to connect with individuals from varying backgrounds. All you’ll require is a genuinely fundamental comprehension of how Instagram or Facebook promotions work.

An individual with experience in advanced social media who can make excellent creatives and content for publicizing might be required. They should guarantee that the creatives are attractive to families and interesting to children of the ages allowed by your station.

Daycare Franchise in India

India has a number of brilliant daycare chains that have a significant and very positive effect on how daycares are perceived and subscribed to. Following is a list of a few of the most prestigious childcare franchises.


Founded in: 2005

Franchising since: 2008

Franchise units: 78

Initial investment: From Rs 2 Lakhs

Hello Kids has become a part of India’s fastest-growing pre-school business. Hello Kids is a place where children learn and develop while studying, attending, and being entertained, with a one-of-a-kind approach. You will get continual support and education in every imaginable way as a Hello Kids-Franchise operator, something that no other pre-school company can promise.


Founded in: 1999

Franchising since: 1999

Franchise units: 1350

Initial investment: From Rs 5 Lakhs

Kidzee, Asia’s leading daycare franchise and a subsidiary of Zee Learn Ltd., has had significant success from its start by equipping children with a child-friendly program and a child-safe educational experience that aids in early school education and individual growth. Kidzee is searching for dedicated innovators that want to be a part of changing the country’s future. With Kidzee Franchise, Asia’s biggest daycare community, one can open their own preschool!


Founded in: 1997

Franchising since: 2001

Franchise units: 1000-10000

Initial investment: From Rs 10 Lakhs

If you want to be an entrepreneur, the EuroKids franchise prospect is the greatest way to get started. EuroKids provides you with a viable potential for profit with seasoned administration and a skilled team of pre-schooling professionals to advise you. They also aid in partnering up and jumpstarting a professional journey through the EDGE 360° – Franchise Assistance Program.

Daycare Resources

Various resources are available for learning important information about running and managing a childcare centre. Some of them are mentioned below.


  1. Child Care Course
  2. CCEI (ChildCare Education Institute)
  3. CareCourses
  4. EarlyYearsCareers


  1. Daycare: Busy Parents Guide to Raise Healthy Kids
  2. How to Run a Daycare
  3. Going to School
  4. The Day Care Manual


  1. Reach out to EuroKids team
  2. Learning Curve India will provide you with the required information about daycares too
  3. KlaySchool is another such franchise you can reach out to


Establishing a good daycare business plan is an exciting process that will help you establish and expand your daycare business in the future. If you follow the template above and include all of the crucial components, you will be a true expert by the end.

You’ll gain a thorough understanding of the childcare sector, your competitors, and your prospective parents. You will have created a detailed business plan and will have a thorough understanding of what it takes to start a daycare, secure the funding you require and expand your business.

This post is also available in: English Hindi


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