How to start your preschool in India?

Starting a Preschool in India? Follow the following steps

centre,Preschools is a rapidly growing business in India. You will be able to find a preschool with daycare, crèche, play school with after-school activity centre, so on and so forth everywhere around you. 

Preschools have been yielding higher revenue with moderate investment, hence most considered business invest in. However, the total investment required varies based on the city, location and how big the preschool premises are. It is important to note that the entry barrier to starting a preschool is not high, but to consistently run the preschool profitability, many key factors need to be planned well and executed.

A Business Plan

Firstly, have a business plan before you start a preschool or playschool. The preschool business plan  is a key phase to starting preschool and the preschool business plan should comprise the following:

Investment and Location

• What is the maximum budget you would like to deploy into the preschool business?
• Preschool location and space
• Infrastructure upgrades to suit the preschool both indoor and outdoor
• The indoor and outdoor toys and equipment
• Source of investment in case you are borrowing as a loan / or from family

Opportunity cost

• If you are not running a preschool, what is the potential income you/team could have earned?

Revenue

• Estimate the max number of children you can cater to
• Revenue sources Mode: Daycare, preschool, playschool with afterschool activities, crèche etc
• Estimate the total revenue based on the  estimated children and revenue source. Estimate both optimistic and pessimistic scenarios.

Expenses

• How many teaching, admin and support staff do you need to hire?
• Funds are required each month for renting, leasing, vehicles, salaries, equipment etc.

Preschool Licenses

State Government have enacted laws like the “Private School Education Acts” which regulate the operations of a school. Therefore, prior to starting a preschool or school, it is important for the Promoters to know about the State Education Act and play to obtain the relevant registrations.

Legal Registrations

Preschools can be set up as a for-profit or not-for-profit enterprise. If the promoters wish to operate the preschool as a for-profit enterprise, then it is advisable to incorporate a private limited company or a Limited Liability Partnership. In case the promoters wish to operate the preschool as a not-for-profit enterprise, then a Section 8 Company or a Trust can be registered.

Loan for Starting Preschool

Arranging funds to invest in your preschool business is crucial. Depending on the size of preschool, the investment requirement would vary. Most banks are favourable for lending to establishing a preschool and for women entrepreneurs. 

Bank's lend loans are typically for the creation of assets like buildings, interior, furniture or equipment. Banks cannot fund operational expenditure such as staff salary, maintenance, rental, utility bill, etc., Therefore, it is important that the promoters draw out a cash flow statement for at least one year. It is very important to maintain clean accounts to assess the cashflow and optimize the same.

How to choose a preschool location & infrastructure

Location and infrastructure is key to success in preschool. The location should have the right amount of outdoor and indoor space for children to play and move freely. The preschool should be located in a child-friendly area , easily accessible for parents to drop and pick up and space should be adequate to set up infrastructure accordingly. Hygienic surroundings are very important, so ensure that the preschool premises is well ventilated  and does not possess any health risk.

In the case of rental properties or leased properties, ensure the agreements are flexible for extension and expansion as well.

GST applicability for schools

GST is not applicable for a school or preschool. The following items are a part of the GST negative list and thus exempt from GST

1. Pre-school education and education upto higher secondary school or equivalent;
2. Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force;
3. Education as a part of an approved vocational education course;”.

However,you will be liable to pay income tax on the profits of the preschool, which may be applicable based on the type of entity established by the promoters (viz., for-profit or not for profit).

Finally, the most important thing is 

Choosing the right  and best preschool curriculum

The preschool curriculum plays a significant role in setting your preschool to success and ensuring your preschool creates a stimulating learning environment and promotes holistic development of children. The curriculum should create learning opportunities for children with different learning styles and family backgrounds. Ensure to choose the holistic development curriculum for your preschool. For a consultation, reach out to preschool experts here.