Contract rewnewal

I was on another site asking and got some feedback and was wanting to hear what you ladies thought as well.
I seemed to have locked myself in by my own contract. Yes, it's my business but I still can't seem to just change things on all families- here is why.

I have my vacation policy that my daycare parents can take 2 weeks on top of my vacation unpaid as long as they give me two weeks written notice. Sooooo another provider broke down what I made a day based on every family taking their addidtional 2 weeks of holidays unpaid. :blink::blink::blink ::blink::blink: WOW! I never looked at it that way. So, I have to suck it up that I can't change this policy with my existing clients as that wouldn't be professional as I'm sure it was one of the resaons they went with me.
I am however going to raise my rates. Now, i can't really do it for everyone BUT think that I should do it all at the same time each year but for this year, i have to stagger and here is why- wanting your thoughts.

I have 2 families that are coming up to their one year that I will bring up to my new rate and get them to sign a new contract but honor the vacation that we ageed upon. The other two families I have in my care just started and I can't in good conscience change their rates. And...one of my families will be leaving me and so I'll have 2 new families joining in Nov and Dec and I can' raise rates on them when they haven't even started :eek: My Dec. family is starting at my new rate.
So...i was thinking to be fair- keeping the vacation policy for all my exisiting signed clients and raising rates for my upcmoing one year families for Oct. Then come Sept. 2013 raise everyon'e rates and get them to sign a new contract. Put out a memo now advising that starting Sept. 2013 that everyone has to resign a contract and put that into my contract.

Fair?| Thoughts ladies I'm on holidays and wanted to get everything sorted before I'm back to work next week.

Just a thought and I'm no accountant but you could lose the free vacation time to all clients and not raise your rates. Tell existing clients a cost of living raise is essential for running your business, but if they prefer to relinquish the free vac time you will not increase your fee for them. You would have to crunch the numbers to see if this works out $ wise. I used to have one week free vac for my clients but they would beg to use them for their kids sick days and then just vac when I did. Hmmmm I learned my lesson the hard way.

Yes ~ offering your clients a 2 week 'unpaid vacation' on top of your already closed period is resulting in you taking an income hit of 4% a year ... that is a hefty hit in income and honestly something that at the end of the day when the chips fall is likely not really 'valued' by your clients as a PERK for your daycare but something they just 'expect' now .... when they go on vacation they are not at home thing 'oh inst Jec so awesome for not charging us these two weeks ~ she totally rocks' .... it has likely not even entered their mind that they are getting a perk over what some other clients get ~ to them it is just normal to not pay you!

Personally I find having clients on different contracts hard for book keeping and worry that in an audit that CRA is going to 'question' and make it harder for me to prove my income based on those difference ~ just easier to have everyone the SAME fee and the same payment requirements for the space. So I would just explain to ALL your clients that it is that time of your for you to 'reflect' on your business model and that upon reflection you have realized why most providers do not offer this 'perk' to clients because at the end of the day it is not financially viable way for you to budget .... therefore moving forward you have reflected on two options ~ A) you could raise your fees across the board by 4% and continue to offer them 2 weeks unpaid vacation policy and you will set aside the increase income to cover for those times when they apply their vacation credit or B) you can leave your fees as they stand however moving forward clients will be paying for the use of the space regardless of the child's attendance the only exception being the following closures (list your closures you do not expect payment for) at this time I have opted for option and than you choose A) or B) whichever makes more sense for YOU .... personally I prefer to have a consistent pay cheque so would opt for option B ~ refrain from the fee increase and put everyone on the pay for the space program.

This is a manner that SHOULD make sense to most clients as it is the way vacation works in the 'employment' world as well your employer either pays you out your vacation on your weekly pay cheque or they 'bank/accrual' the 4% for you and they pay it out to you when you choose to take vacation.

I would also add something to your contract that contracts will be reviewed annually and subject to change with X amount of notice ~ because it is prudent that you are able to make changes as needed to keep the business viable and competitive ... and than you give clients the new contract with ample notice before it takes effect with a reminder that signed contracts need to be returned by X date failure to return the notice will be taken as clients decision not to renew under the new conditions and the space in the program will therefore cease to be available as of X date. Than you know for sure you can start advertizing to fill the spot with a new client.

Why dont you redo your contracts for all new clients NOW, and send out a notice for 2013 for existing clients. That gives then the rest of the year to use their promised vacation time and such. After that.....the rules of the game change. I usually give a month or two notice when making certain changes i.e. rates or hours change. But for little stiff...I change immediately. If I were to change my vacation time, I think it would be very fair to let them have this year as promised and start new in the New Year.

I agree ... my business runs January to December and all financial changes take place for January 1st of that tax year and I send out notice to current clients at least 60 days prior to that so now is when I would be 'thinking / reflecting' on changes so any clients signed on NOW would be being told the NEW plan for 2013 ... so that they did not feel they just signed on and 'wham' something is being changed on them already.

Since summer just ended you could send out a memo now saying that come next summer the following changes will be in effect as of June 2013 that there is no additional time off - book vacation when I do or pay accordingly and that effective Sept 2013 the daily rate will be. Then they have a year to plan, question, etc. Adding a reminder come March when you set your holidays for the summer should be enough. Many will need to book their weeks that early so you will need to decide when you will be closed.

I chose September to renew my contract for two reasons. 1)It's my fiscal year 2) Typically it's an easier time of year to fill spots.
The thing is, I didn't think this entire thing out until someone else brought it to my attention just how much I was giving away in my income. I was going to raise my rates based on my client's one year anniversary but....have come to learn that it's just better business sense to do it all at once.
I already signed a family for December with my new rate. So...I can't really in good conscience change that on the 2 new families in my care and another that is starting in Nov at my old rate.

I just always try to put the shoe on the other foot. I look at this as my own mistake with my own contract that I made up. My own inexperience is not their fault. If I was them and joined with something and then before starting get a rate increase- I'd be telling that provider we would be going elsewhere based on principle. Not professional. This is coming from a Mom who paid full pop during a maturnity leave to our provider to ensure our kids were with the provider we felt our kids were safe with so..I do put care first as I did for our kids but - just would be turned off by a note of raised rates before even starting.

Am I being over sensitive? Thanks ladies...I'm really struggling with this

:laugh: I answered on the other site, shhhhhhh! Too funny Jec.

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Originally Posted by Momof4

:laugh: I answered on the other site, shhhhhhh! Too funny Jec.

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It is very much a small world isn't it!! :thumbup:
Thanks for the advice

Thanks for the advice ladies ~ you've given me lots to think about!! Always something new to learn isn't there!