Announcing a rate increase

Hi,

Is there a good way to announce a rate increase?
What do you say to make parents feel better?

:huh:

I don't raise rates for families already in care but sometimes set a new rate for families that are starting. I explain it with the idea that as long as you stay in care your rate never changes. I have families at three different rates right now and the lowest ones will be the family leaving this summer for child to start school and the new family coming in will be paying slightly higher than the family that started 2 years ago.

If for some reason I was doing an across the board raise I would do it in newsletter form, give them a couple months notice and an explanation as to why the increase is necessary. I would also add something about anyone that finds that this change presents a hardship to speak to me. Ideally that allows you to know who isn't happy with the decision and who might decide to look for care elsewhere so it gives you a heads up.

I have it in my contract that at the time of the annual review of contract, there may be a rate increase of up to 3 %; that way it is no surprise.

I have annual contracts that expire Dec 31st every year. Each Jan all parents are on a new contract and that contract ALWAYS includes a fee increase.

EVERY provider should be raising their fees AT LEAST one dollar per day per child. EVERY YEAR. And often, that one dollar barely covers the inflationary cost of just providing care. If you don't raise your fees every year then each year you care for that child you actually earn less money.

You only earn less money if you don't balance out your expenses. The more toys you buy one year the less you need to buy as the years go on and that offsets any food or household increases. Also if your utilities go up you get a higher deduction so it brings taxable income down. In some areas costs fluctuate a lot and in others things stay pretty stable. I basicalliy raise my rates every two years as I raise them for new incoming families and usually put them up 2-5 a day - whatever is in keeping with the averages in my area. In this way I reward loyalty of current families. It is like rent for an apartment. A landlord can only raise the price a small amount each year but once that tenant moves out he can raise the rent to whatever he wants for incoming people. I use my daycare spaces the same way.

I too have an increase each year of $1/day. Every December I look over the current contract and handbook with all of my policies and procedures and decide what I want to change and add etc. The parents are given the new contract and handbook to look over and sign by the beginning of the new year. In my handbook it says that there will be an annual increase each year so there are no surprises that it is coming. If they don't like the policy then they don't have to sign with me. With all the increases in prices lately the costs for craft supplies, food, toys and books are crazy!!