Advice needed asap. Holding fee

Hi everyone. I have a lady calling me hopefully today regarding a spot but she needs care to start about 6-8 weeks after my spot is available. I told her she had 2 options, either start early or pay a holding fee until her start date. problem is that I have never charged a holding fee and have no idea what is reasonable. another question, if you are charging someone a holding fee do yo give them the option of bringing the child to you once in awhile at no charge? I'm guessing that someone might think that since they are paying something that they are entitiled to use some days. thanks

This is such a hard one.

The problem with the holding fee is that if the client doesn't work out and you want to terminate in the first 30 days you may feel a stronger obligation to hold onto them based on all of the holding fee money they've already paid you.

When I have this situation I come up I look at a few different factors. I decide if I can afford to go without that income for 2 months. If not, I decide what I need to maintain my budget until that client starts.

If I can afford to do it, then I do. If I love the client, they have great hours and it makes sense for me to wait then I usually do.

I have never charged a holding fee. If i can't afford to wait for the client that I put them first on the waiting list for that time and I make a first desicsion 4 weeks before the desired start date. I get a the deposit and off we go.

Good morning Gramma. I'd be careful charging parents holding fee's. Maybe some of the ladies here will be more knowledgeable than me, but I seem to recall CRA regulations say that we can't charge parents to hold spots. What might work better (and be more palatable to the Mum) is if you tell her that she will need to pay one or two days worth of dues every week until she is ready to start up full time. Tell her that she is free to use those two days of care - spin it as a super long transition period for the little one - or not - whatever her needs are that week. In an ideal world, she'll be delighted to have a child free day each week where she can get things done. i.e. dental appointments, meeting with her boss to organize her back to work schedule, etc. She should still pay a deposit of two weeks dues to be applied to her child's last two weeks of care. I did this with my daycare babies and most parents have been quite happy with the arrangement.

You could also offer to split the difference with them. I did this with my most recent client - she wanted to start up in January, I was hoping to fill the space for October. We agreed to a start up time at the beginning of December - she paid for 6 extra weeks, I agreed to "lose" the income for six weeks.

I have a holding fee of $250/month (due on the first of each month) for a spot when the start date is more then 4 weeks in advance. The fee is non refundable and goes toward holding the spot only. If they want to use the spot then care commences and they start paying the weekly fee regardless of how many days they each week. I also require a deposit of two weeks fees to be applied to the last two weeks of already commenced care. Then on the Friday before they are to start they send the first two weeks of care.

I have had a different experience then apples and bananas .... I had two different families in my first year to hold spots .... One for 3.5 months and the other for 5.5 months for only a two week deposit and both families gave me the shaft ... I then changed my policy to my current holding fee policy and I have had two families use it and both are still with me .... The first one held the spot for 4 months and the second one for 2 months ..... I found both families were more committed to preparing their baby for group care..... And both are golden families !

My holding fee is 50% of regular fees. I had a family pay this for 7 months. I had just moved house and reopened my daycare in a new area and wanted to only have a light load of children so I could have more time to get unpacked, organized and decorate. I new when I wanted to be at capacity so I accepted enquiries and at that time there was a huge shortage of providers in the area so parents new that if they didnt pay to secure a spot then there was a very small chance they would find a provider. There is no immediate financial benefit to holding a spot for an extended period of time only a certain amount of assurance that you have filled the spot in plenty of time but everyones circumstances change so this isnt always the case. Yes they may shaft you and by making a financial commitment you know they are more serious about the arrangement. I would add to your contract that this holding fee is not refundable as it is compensation for you losing money by holding the spot for them. If you wanted to offer the family more assurance I would perhaps give a minimum commitment time of 60 days or put in a clause that if you terminate the contract before care starts that you will refund the money but if they terminate then they lose all the money.

There are lots of ways to go about this and I dont think there is 1 way that the majority do. You have to think about your area and what you are willing to do in your business. Good Luck, I know it is a difficult decision.

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Originally Posted by Monday 2 Friday Mama

Good morning Gramma. I'd be careful charging parents holding fee's. Maybe some of the ladies here will be more knowledgeable than me, but I seem to recall CRA regulations say that we can't charge parents to hold spots. What might work better (and be more palatable to the Mum) is if you tell her that she will need to pay one or two days worth of dues every week until she is ready to start up full time. Tell her that she is free to use those two days of care - spin it as a super long transition period for the little one - or not - whatever her needs are that week. In an ideal world, she'll be delighted to have a child free day each week where she can get things done. i.e. dental appointments, meeting with her boss to organize her back to work schedule, etc. She should still pay a deposit of two weeks dues to be applied to her child's last two weeks of care. I did this with my daycare babies and most parents have been quite happy with the arrangement.

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I love this idea. Seems very fair and if you can afford to only have 2 days a week for a while, it will give you a bit of a light load and an easy transition when the child is ready for full time. Great idea!

thanks for all the ideas. I think i will phrase it differently than a holding fee as suggested and say that x number of days per week must be paid and that she is welcome to use them the 48 hours notice so i am prepared. I dont want to be a last minute drop in center. i will also say that it has to be full days so that naps and activities arent interrupted. I may be getting ahead of myself, i have only spoke through email but wanted to be prepared. thanks so much ladies.

I would probably ask for an answer on the weekend as to the plan for the coming week so that you can plan food and crafts accordingly. Not much good finding out she is coming on a day you planned a craft and won't have enough supplies for.

I agree with Playfelt. I would ask for a schedule by Friday close for the following week. Anyone who can't plan like that while on mat leave (I'm assuming on mat leave) is not someone I want in my care. I would need to know numbers for meal planning and craft planning anyways.

If she's just by email right now then you can really send this message from day one. Good for you for looking for answers before you need them. Great job being prepared.