Setting Fees - Advice?

I am moving, and my daycare will be in a much smaller town, so of course I realize I can't charge big city prices.

But...

I have been advertising for three dollars a day above the going rate. Everyone nearby is charging $35, and I am testing the waters at $38. I feel that I have an angle that some of the other daycares don't have in my area, so I think that I stand out a little from the norm. Problem is, there seems to be an abundance of day homes in this area advertising at the moment.

This community is currently experiencing a great deal of growth, and is attracting the city folk. Many house farms are being erected, and the local commuter trains will soon be stopping out here as well, making it a full fledged bedroom community. It currently sits at about 45k population.

How long do you think I should keep my prices above the norm before conceding and dropping down to $35? Should I just stand my ground and see? Or should I just join the others now? I'd like to fill up sooner rather than later, but I do have a little time to play with.

ETA: I think that the industry could stand the $3 a day hike, and maybe I'd be doing my brethren a favour by setting the norm a little higher? Or is that arrogant?

Any advice or guidance would be greatly appreciated.

Quote:

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Originally Posted by Alphaghetti

ETA: I think that the industry could stand the $3 a day hike, and maybe I'd be doing my brethren a favour by setting the norm a little higher? Or is that arrogant?

Any advice or guidance would be greatly appreciated.

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NOT arrogant. I, too, think a lot of home daycare providers are undercharging for their services and sometimes it just takes ONE person to charge more and then those undercharging providers see that you CAN fill up with that higher fee and they start to go, "Huh?". Before long, you will see their fees sneak up there near yours. I have seen this in my own neighbourhood.

If you were settled in the new area and established with a reputation there I think you would have a better chance of arguing for the higher amount and likely get it. Since you are also dealing with the new to the area - regardless of if you have provided care before everything is new including routines since your house layout is different etc so it will feel to a certain extent yourself that you are just starting out - efficiency will come quickly just not at first - moved many times and started over since hubby is military.

I would sort of be inclined to set my price at the going rate for this year to get the first clients in and then raise it with each new replacement. That is basically what I have done as I moved. Then I was being judged on all those extra things I was bringing because I was equal in other areas such as cost.

Good point, playfelt. Thanks.

Yup - I started out trying to charge more than the going rate in my neighborhood and despite my 'niche' I struggled getting that first 'bite' so I reduced my rates to the high end of normal in my area ... and than have slowly increased my rates by adding 'paid vacation days' and 'paid personal days' to my contracts so that on the surface I am charging still the 'high end' in my area but on paper I am making that $3 a day more than others in my neighborhood and reflective of what others are able to charge in the 'expensive' end of town.