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Recently, a new provider moved into the house 3 doors down from me. I had her over for coffee, talked about the biz with her and befriended her. Well, didn't I just see her listing online for $15 below my rate and $8-$10 below the going rate in the area! Seriously???? What the hell??? Sooooo not cool! I was more than a little astounded to see that.
Oh well....guess she'll weed out the clients the rest of us don't want. Good luck with that bunch :)
There are providers here that offer $10-$15 less and I do wonder how they do it on so little. However, I don't know their financial situation so maybe they can afford it and if so that is great! It also offers parents affordable daycare. Around here, many parents make minimum wage or just a bit higher so paying $600 for one child in dc can take almost one of their paycheques.
I know what you're saying by weeding out certain clients and to an extent I agree. However, not all parents who choose cheaper dc are "bad" parents just as not all cheap dcproviders provide "bad" service.
Hopefully her cheaper prices won't affect you! :)
**also, could she maybe be offering this cheap rate for now to fill her spots and then raise the fee's as she is in the business longer?
I agree with your points for the most part. I have found though, that the lower paying clients, in my past anyway, have been the most difficult. This is why I've raised my rates and it's paid off in that regard. That being said, I live in a fairly affluent area....not my neighbourhood per se....the area surrounding me. Yes, I believe she's only charging that to pull clients in. I know it won't really affect me as I've been here for a while, have a really good set up and reputation. I was just a bit put off because that's really, really low.
I am just North of you cfred and rates here are much lower then what I suspect that you are charging. I know, personally, that I charge less then the average for a few reasons. Firstly, I opened the daycare in September, right after I moved to this area. I wanted to attempt to fill the spaces as quickly as possible. Secondly, I was (and am) preggers when I opened the daycare, so I needed to provide some sort of incentive to go with me, knowing that come April, I would need to take 2 weeks off. Thirdly, I am on the younger side, and I find that I often get judged because of it. Offering a lower rate allowed the parents to give me a chance (I have the experience!) That being said, I have gotten a good base of clients (mostly part time and b/a school) and now have referrals coming in to fill full time spots come the summer and even into October. Would I have such a high demand if I had a higher price? I am not sure. I am looking into raising my rates come the new year now that I have made a name for myself.
Yes, I came in low when I first moved here as well.....$1 under....then jacked fees up above everyone else once I had a good base. But $15...wow...that's a massive difference. I had my little rant and I'm over my catty bit (the fingers hit the keyboard before my brain thought about it too much). I'm not all that concerned...not concerned at all actually. I'm well established now. I was just shocked and a bit taken aback.
Wowzers! $15?! Here I thought that you meant $20-$25.....lol!
I feel that if a parent is given the choice between two daycares and both are equal in every way (as in the parent can see their child fitting into both just fine, they both offer great care and hours they need etc) than they logically will go with the one who charges less. That is what I would do anyways.
I don't think that means they are any less of a parent for choosing that route. I also don't take offense when people tell me that I charge too high or ask if I can give them a discount. Sure it can be annoying but at the same time, I try to put myself in their shoes. I am offering a service and I know when I am looking into services, I will ask around for the best price. Yes, we are looking after their loved ones and ideally, the cost of what we charge shouldn't be the first question but if it is, so be it. We can't expect parents to pay us a huge chunk of their paycheque and than have to scrape too get by on their other expenses, including their child (clothing, food, entertainment etc). There's no harm in asking right?
It sounds like you have a great dc, are established and have a good reputation including references so try not to let it bother you too much :) (we are human, so yes things like this will annoy and bother us from time to time! ) Bottom line is, parents are either going to be easy or hard to deal with because that is just who they are, it has nothing to do with how much they are paying us lol. (in my experience anyways)
Cfred meant $15 under the going rate not $15/dayQuote:
Originally Posted by ttremble88
That's correct Crayola....$15 under my rate.....$10-$12 under the going rate. Honestly, it was a momentary shock, and yes, I was a bit put off by it. However, I guess we've all gotta do what we've gotta do to make a go of it. I'm totally confident of my business and capabilities and am not feeling threatened. Like I said...momentary shock and quick reaction.
With regards to judging based on pay, I can only say that it has been MY experience. A few times in the past (when I was still very green) clients have 'convinced' me to go lower on my price because of what others were charging. Being a bit wet behind the ears and living a rural area where it was hard to get clients, I accepted the lower rate. They were, across the board, the worst clients I'd ever had. Absolutely. Of course I can't paint everyone with one brush. If I was looking for daycare, my income would certainly dictate that finance would be a huge issue to be considered. I'd like to think I'd be a good client. I am speaking only from my experiences...which weren't awesome.
It bugs me when people do it in my area too.
When I started - most places were at $35 a day but my area was charging between $25 - $30 a day.
I really didn't want to put myself at $30 a day considering that I had paid my own daycare provider $35 in the GTA and that was about 4-6 years before I started a daycare. It seemed crazy to do so much work for $30 a day.
So I started at $32 a day and then got three families. After my first 3 families...I put the price to $35 for any subsequent families.
I never felt comfortable raising my initial families the $3 per day. It seemed a lot to go up 9%. It would have meant an extra $15 per week which starts to seem like a lot to families.
I think it is dangerous for people to start at $28 a day and then plan to raise it to $35 in a few months. It is a bait and switch. It isn't the most ethical practice.
I have had a few weary interviews where people ask whether I will suddenly raise prices.
We work really hard for the money and I think the providers need to unite to get what we are worth. By undercutting rates we are making it difficult for others. Providers should have a similar price structure and then try and attract clients based on merit rather than price. I feel like it is disrespectful for providers to lower prices below the norm no matter how desperate they are.
I would probably talk to the provider and tell her that you noticed her price and you understand why she probably wants to attract clients but that she may have a hard time raising the prices significantly down the road or risk the clients bailing for another cheap daycare.
Quote:
Originally Posted by ttremble88
I'm going to be new to daycare, but I'm not new to business. I've been self-employed for 30 of the last 35 years of my life.Quote:
Originally Posted by Spixie33
Pricing is one of the hardest parts of starting a business. People often want to start a little low to get business, then go up once they get established. There are a few issues with that.
- It could be unethical
- You could lose clients when you raise prices
- An initial low price may have a negative effect - look like you don't know what you're doing, or you're offering low quality products or services
- More likely to bring in the wrong type or clients
When raising prices, it can't be a big change all at once. If a big change has to be made, it should be in increments with advance notice.
Yes, that's right. I don't agree with the 'bait and switch' method either. I think that's highly unethical and a dangerous practice for anyone looking to build a good reputation. I really don't think she's looking to do that. I've met her and can't imagine that's what she's got in mind. I started out at $39 which is what I was charging at my old location. 3 clients followed me here and I brought on 4 more clients (2 being part time) at the same price. One left so I upped that space to $42 to see what happened. I filled it in no time. When the next moved on, I raised to $45 and was still able to fill it quickly. I've now raised to what was $5 above everyone else in the area....BUT I had to suck it up and keep the lower rates for clients who started out there. The only others charging that were large facilities. I've also eliminated part time services (yay!). I feel that I raised my rates in a very appropriate manner and actually may have helped raised the rates in the area. I spoke with a couple other providers who said it's been at $40 for years. When I indicated what I was charging, there was a little bit of shock, but I've noticed the prices starting to climb since then. Many are still at $40, but I'm seeing a definite turn. My rates also continue to climb as I raise them by $1 every year as a cost of living increase. I've not had an issue yet :) I just feel that if we don't step up and start demanding what we're worth, it's just never going to happen. And yes, that was sort of my feeling with the new daycare undercutting by so much.
Exactly cfred. I hear ya!
Like I said - when I started this area was $25-$30. No one was charging $35 even though that is a pretty standard rate in most parts of Ontario since a decade ago.
I put my rate to $35 after getting my first few families and it took a year or so but soon others followed. I would even talk to other daycare providers at the park and try to convince them to raise their rates and why. Now, when I search daycarebear...the standard rate for 80% of daycares in this area is $35.
Sometimes I see a newbie start at $20 a day or $25 a day and I am tempted to send them an email :huh: telling them that we have to band together.
If daycare providers all stuck together then we could all be judged on our program and what we offer and get paid fairly for the hard and important work we do. I would love to raise my rates to $40 and will possibly start doing that for the next group of new families.
In my business, I checked the listings on here for other providers in my area and listed at $2 above them all. That was going great for my 2 first clients, then as time went on and I interviewed and chatted with more parents I realized that I have a special service going with my daycare - I only accept toddlers under age 2 (for now until this law possibly goes through) so I became in high demand. Alot of parents I spoke with and interviewed said how they weren't comfortable with the school agers and older kiddos around, they wanted their child to have playmates the same age. So, I increased my rate by $5 and kept it the same and have not raised it.
CFred, you made a good point - the parents that have haggled the most with rates, discounts etc have been the WORST clients I have had and things did not work out.
I say, stick to your guns, sounds like you have a wonderful daycare and are doing well :-)
Sassygirl, I think we may be on the same page. I do charge more because, like you, I'm a little more specialized. My schtick is a little different too. Like you, I only take little guys. Really, that's the area I really shine. And with my kids being older, I have zero desire to do school runs...forget that!!! I have my ECE and I flaunt that freely in interviews. I also am almost always available to my clients, which I think is fairly unheard of. We socialize (out for dinner tonight with one) and I set up dinners so the mother's can all get to know each other, which has been fantastic! Clients can reach me at almost any time (and they do) for questions, concerns or just to shoot the breeze. We become friends. It's a very, very open relationship and they seem to value it. This also involves them to some degree in the process of bringing in new families because they WANT someone on board who they will mesh with. That, I think, has been a considerable factor, combined with the other facets, in getting the clients that I do have. Plus I cater to vegetarian, vegan, etc, etc, have an extensive menu and indicate that my higher prices foster that. So far, so good....not even a bat of an eyelash at the price or increases :) There are so many different ways to run this business which is what I love about it. To be able to tailor your business to suit your own vision is incredible.....hopef ully the government doesn't step in a ruin it...fingers crossed!
I have a question while we're on this topic. I provide a preschool type program 3 days a week but I don't have my ECE or credentials for running a preschool. I have clients now and in the past that chose to skip preschool because I have a similar program to the preschools. I'm wondering if it would be out of line to charge extra on the days that I provide this service?
I'm not really sure actually. What makes your preschool services different from daycare? What sort of activities do you do? I worked in a preschool as one of my placements in college. I didn't really see any difference in the programming from the daycare settings I worked in. We did the same activities with the only difference being that in preschool there were no lunches or naps and there were morning and afternoon sessions. Preschool was more for parents who just wanted their kids to socialize and have out of home activities. Not being sure what you offer that differs I couldn't really say yes or no to the increased fees.
I also provide what I call "kindergarten readiness" curriculum once children are about 3 and able to do some table work and structured lessons. It is really just a part of my regular day care routine but as the children are older, the learning is more specific and outcome-based. They are still learning tons when they are younger. I don't charge any more for this but I do use it as a selling point to differentiate myself from other home child cares. Also to keep the kids with me once they are older, so the parents don't pull them for group care, which in my area is considerably cheaper than my low ratio home child care. But my rate is already $50/day, which is on the high side but is common for my area.
I think most home daycares are doing some sort of preschool program at this point. Well...at least half of them in my area are. I think parents expect you to teach the counting, cutting , abcs, gluing, letter recognition etc at this point.Quote:
Originally Posted by daycaremom9
I guess you would have to see what other people in your area are offering and see whether you are truly offering something that others aren't.
On this topic, is anyone in the greater Edmonton Area? I've been wondering if my fees are comparable to what's out there now :) I'm at $750/m for ft, which works out to about $34/day (going on average of 22 open days per month). Food costs have gone up in the two years + since I've been open and I have never rasied my rates.
I have preschool/learning intergrated into our day, have weekly themes with corresponding activities and menu (when possible).
Wowsy !!! I started in September and prob lowered the going rate too !! Not by ignorance but when your first starting it's intimidating to think I should charge as much as the dayhomes that are more established !!
I also teach a preschool program , started more for a more structured day , but then realized through a friend teaching preschool that we almost did the exact unit study on transportation !
My new dck are being charged $34 each per day (x2 brother / sister ) and I'm a lot more confident in myself and my dayhome . Maybe your neighbour say your dayhome and did not feel on the same level , so she lowered hers ?
I would not raise my price for my original families until at least a year and have the confidence to put a value on my dayhome .
Just my opinion !