Is this reasonable?

[jodaycare]

So all of my new clients have been here for a year now, only one has been here for almost 2 years (jan). I was thinking about raising my rates by $5 a week on Jan 1, this works out to $1 a day or $.10 an hour based on a 10 hour day. I don't usually raise rates for existing clients, I have actually only done it once in 19 years. I only give the new rate to new clients and leave everyone else the same. Do you think I should write up a notice for Dec 1, saying that the new rates will be effective Jan 1?

[sunnydays]

Do you have it in your contract that you may raise rates yearly? If yes, then go for it! I raise my rates by a dollar per day yearly in Jan (except for clients who started with me only a few months before teh end of the year...I wait until the next year for them).

[jodaycare]

No I don't have anything in my contract. A few years ago I raised them for existing and new clients. Then when I had a whole new crew start last fall I raised them for the new ones only but they didn't know that. I am still well below the provincial average for home daycare, which is $43/day for toddlers. If I do increase I will only be at $38/day for the young ones and $37 for the preschoolers. The cost of running the daycare has gone up considerably, especially the cost of food.

[bright sparks]

I think it's completely reasonable to want a pay increase, as I am sure that all your clients get an annual pay rise to. I think a more accurate way to gauge where you average with your daily rate, is to look at your competition in your immediate area, so within just a few blocks and also in your town. The cost per day varies substantially across Ontario, not sure where you are, so that's probably a better way of knowing whether you are priced competitively. I also find that having all my daycare parents pay the same rate, makes book keeping so much easier.

I am priced at the top end for my area, but justify it based on the program I offer, daycare space and meal plan. This year I really want to raise my rates due to time of use hydro making a substantial difference on my bills but I don't want to price myself out of the market. Instead I am adding a few paid days off in the year to compensate me in an alternative way.

[playfelt]

You mention the "provincial" average. What the rates are in your particular area is what is more important as that will determine how competitive your daycare is. If you feel that the rates you are charging are less than what others in your area are charging then you can use that as justification to raise the rates for everyone.

[kidlove]

go for it! I don't think many parents would have a problem with that little anyway. I have only raised my rates once in almost 10 years, but when I did, it was 5$ a day. Nobody complained. :)

[Inspired by Reggio]

Yup perfectly reasonable ... how many business do not have COL increases on their services or products at least annually?

My contracts state that fees will be reviewed annually and subject to change with 60 days written notice and resigning of a new contract.

That said I have tended to raise my rates 'alternate' years since I opened ... which works out to about a 2% increase per year which is WAY BELOW provincial average of COL increases ... this is the first 'alternate' year that I am due to raise my rates however have decided to refrain because while I am mid range for my overall CITY I am already at the high end for my neighborhood and I am not sure that with the current economy factors the market could bare an increase to me ... all this talk in the media about a possible recession has people getting more frugal which means that they are choosing daycare on the must haves of 'safe and fed' and not willing to invest that extra in the 'nice to haves' of 'has a program that covers all areas of developmental progress ... art, science, sensory, etc.'!

[Momof4]

I renew my contracts annually because I'm still perfecting my policies so once a year when the parents sign the new contract for the next year it states in there that everything is guaranteed for the year. I won't spring any surprises on them because that would be bad business practice.

However, since you've been in the business for 19 years Jodaycare, I'm sure your contract is perfected. I think your plan is great, to make up a letter to the parents now as advance warning that there will be a rate change coming up so they can budget for it properly and have time to digest the news. I raised my rates this year and the reason I gave was also exactly as you stated - to keep up with the rising cost of food.