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View Full Version : Rate Increases - the when and the how



Spixie33
04-19-2011, 10:33 AM
I am wondering about how and when people have raised their rates. I am a fairly new daycare. I started September 2010. At the time I was having issues getting people so I started off with cheaper rates to attract people in. I had advertised from April - Sept with little to no bites to my daycare so I lowered the price from $35 to $32 and within a week I had the kids I wanted.

However...I do quality foods (homecooked, organic when possible and not cheap brands), I do good quality crafts and craft supplies, buy good presents for the kids for birthdays, etc and quite frankly it seems like the price of everything has gone up i.e the dollar store prices and GROCERIES ! Yikes.

So....I feel like giving parents a rate increase even though I am only about 7.5 months in and making the rate $35. That is the rate I used to pay for my kids a few years ago at both daycares I used and it doesn't seem to be asking for too much.

I am just wondering if everyone waits for the 1 year mark with new families that they get or whether they have ever increased their rates in the middle of a year. I do not plan to officially 'renew' the contract every year - the parents are here as long as they want and so far I am with the same group of families I started with.

So I struggle because on one hand I know I am worth more. I do good programming and a good job but yet I hold back because it hasn't been a year yet at the current rate.

I also struggle because some people in our area advertise for $25, $28 and $30. I am not sure how they can afford that or whether they are just desperate to get people but I feel bad raising my price if several other local providers are advertising so low :unsure:.

horsegirl
04-19-2011, 12:04 PM
We charge between $35 - $40 in our area. I will not be a "save on daycare". I charge $40. per day and when a parent calls, with the usual "do you have any openings and what do you charge" I suggest that they get to know who I am and what I offer to their family before we discuss rates. Usually by telling them about me and my background I can set up a meeting time and then I will discuss my monthly rate.

I advertise, made a web site, dropped off business cards at stores in our area, put posters up a schools & playgrounds, advertise in our local paper, network with other caregivers, take courses in our area, am involved in my children's school and by doing all of this many people know me. Networking seemed to be the best way to fill my daycare.:thumbup:

If I was you I would wait for the year and raise my rates. I would send home a notice at least 2 months before the rate increase. If families suggest they will leave because of what you charge let them know what you make per hour. (you may not want these families in your daycare as there will always be issues with fees) :glare:

I am open 7AM till 5:30PM--that means I make $3.81 per hour. Ask your parents what they pay a sitter per hour, usually $6-$10 and ask them what they make per hour. Let them know what you offer for so little per hour and what they get from a sitter. I think when you break it down this way they seem to understand better. Also let parents know that they are credited 20% of their daycare fees on their income tax. This means that they pay me $40 X 20% and they are credited $8. per day--son they are only paying me $32.00 per day.

Good Luck and do not give away your very important service.

Spixie33
04-19-2011, 12:22 PM
That is actually a great reply horsegirl. Thank you. It helps to get things in perspective. I always try and talk to my hubby or friends and bounce daycare things off of them but they never understand or can really put it in perspective the way another provider can.

I have the same hours as you. I think the avg rate here is $35. I have seen $40 and even $42 per day but then it seems some people are advertising online really cheap like I mentionned.

I am not looking for any more children right now. I will probably accept 1 full time child in the fall when one of my Pters leaves for JK. I like to keep the #s low. Better for the kids, my sanity and ability to program that way.

playfelt
04-19-2011, 04:02 PM
What I do is raise rates for new families coming in but reward loyalty by not raising rates of families in care. Sort of like a landlord does with apartments. When someone moves out he can raise the rate to whatever he wants to. I think I would be waiting till the one year mark to raise the rates but do give your families some notice that it is coming and ask anyone with concerns to speak to you as soon as possible. Hopefully that will give you an idea of anyone that is thinking of moving on.