Advice needed about pricing, simple or complex

I have pricing all figure out for my new business, but I'm wondering if I'm making it too complicated. I've been in business most of my life and math was always my best subject, so numbers to me are like baking to a chef.

Most prices I've seen on other websites are very simple, but when deciding on my prices I was thinking about how parents have different needs, like 2 or 3 days a week or 2 or 3 hours a day, so I have pricing for hourly, daily, weekly, and monthly, with prices calculated so parents who only need 3 days a week get a bit cheaper paying daily, or parents who only need short days get cheaper paying by the hour. Billing would obviously be weekly or monthly, but the rate would be whatever works best for the parents. Then of course, the rate is different for different age ranges because babies need more one on one time than older kids.

Is that being too complicated? Have any of you used variable pricing and made it simpler later on? If so, why? Have any of you started too simple and had to make it more variable later on?

Hi Mike. That seems a bit complicated to me. My prices are: $35 for a full day; $20 for a 1/2 day (if lunch needed, then they pay for a full day). I also have a 3 day minimum for part timers. For me, they all pay the same amount whether they're a baby or not.

Wow !! But I too keep it simple . Full time is a certain price and part time a certain price , that way you can keep track easier . I also charge whether they attend or not as their space is available for them so I'm not keeping a space open and losing money while grandma babysits . The way you are pricing , what happens if a full timer comes a half day or misses a day ? Will you readjust what they owe each month ?
I think your right that numbers people would have no problems figuring it out !! For me personally I keep it simple lol

Whether math is your strong point or not, it will likely get complicated when you start having multiple children at different rates. It will be a lot more work to keep attendance and rates clear.

In my province (MB) we are restricted to 4 children at any one time. Therefore, at my dc, you are paying for the spot not the hours or days. I keep it simple, $30 for regular days and children's sick days, $20 for stat days that I am closed and for days that they take their child our for holidays or if a family member wants to babysit(this fee is only applied if they tell me before payment is due though) and 0 for my holidays and sick days which I reimburse on the next pay period.

However, I didn't start out this way. I started off with letting part time kids only pay on the days they came. I quickly realized this wasn't going to work as I needed a more stable income. I had a big turn over last summer (3 out of 4 left) so I took that opportunity to change to paying for the spot not the days. Of course though, my one that stayed was a part timer and I have allowed her to stay on that contract. So unfortunately I have 3 full time children and 1 part time child with an opening spot for only Mon/Tues. It can be tricky to fill the opposite days for part timers which was another reason I wanted to eliminate them. I am hoping to eventually have all 4 spots paid for full time whether they are here or not. The only complicated thing I am adding now, is I am raising my fee for the open spot to $35 and any future spots will be this rate too.

It's up to you of course, but IMO, simple is easier! It also gives you a better idea of what to expect for your income.

Even after reading my own post, I realised it sounds complicated. The variable income would also be an issue. As far as things like "what happens if a full timer comes a half day or misses a day", what I had planned was, they select the best plan for them and it only changes if they have a long term change, but that doesn't matter anyway now. I'm going to modify my pricing. Make it a little simpler.

I was reading up on some older posts and from all of your suggestions, I also decided that I'm only going to have 2 part time positions, first come, first served.

I have full time and part time and I only offer part time (min 3 day/week) to current clients going on mat leave or in the summer for school teachers. ...... No 1/2 day or hourly.... And you pay for every day of every week for the whole year regardless of whether the child attends.

Math was also my best subject and also worked for some years as a cost estimator and pricing analyst, but for HDC is not that complicated. Since there are not many providers in my area I started charging what agencies were charging for part time and full time to be competitive when I left the agency (after a year working for them). Kids that come full time pay for all days, even the days when they are absent or come part time. They pay for the spot, not for the hours used. I am currently accepting full time only. I do not offer discount for siblings either. You can also take a look at dcb ads in your area and see what others are charging for part time/full time and what they are offering. It depends on the competition in your area. I heard in some areas you can have paid personal days. In my area I do not think that would fly since agencies and daycare centers (which are my main competition) are not asking for this, but when I was offering part time I was able to have minimum 3 days and no half days since these are agencies minimum requirements for part time here.

All of mine pay for full time, all year round. Only days they don't pay is if I am closed due to illness or holiday. This keeps my income secure.

I have f/t time and p/t day rates, but all the dck's are here by 9:00. what you are suggesting by even offering hourly rates will result in kids coming and going at all times of the day and that is a huge disruption to your daycare day. I would suggest to keep it simple otherwise it will be difficult to calculate and probably more often than not the parents will keep their own tally which would be different from yours (my clients whose children are here f/t still get their tally wrong!!)
..............I'm exhausted just thinking about it LOL

My rates are either full time(4-5days a week) or part time is 3 days a week minimum. I choose whether I open up part-time spots or not. Often I prefer to wait to get a full-timer. I only take little ones under 2 years on a full-time basis. Part time kids pay $5 a day more. I do not offer 1/2 days or drop-ins by the hour, as I need to know what my income will be each month, and I want a consistent group of kids. They pay for all their days and stats, whether they use them or not. I also get paid for 2 weeks of holidays. I don't discount for siblings or any other reason.

I only have full-time and part-time rates as well (though I don't generally take part-time anymore). Part-time rates are usually a bit higher daily rate than full-time rates. Also, I have not heard of home daycares charging different rates for different ages. If they are full-time it is one rate if they are before and after school it is another. I don't think there is actually that much difference in the care needs of a 12 month old and a 2 year old for example. The 12 month old has more physical needs like diaper changing, being fed, being held, etc. But the 2 year old has more behavioural, educational needs. A 3 year old will need more educational activities, school-readiness prep etc. I don't find one age more work than the other. And by the time they get a bit easier, they head off to school...LOL.

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Originally Posted by sunnydays

I have not heard of home daycares charging different rates for different ages. If they are full-time it is one rate if they are before and after school it is another.

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Interesting. When I was first thinking about the idea, I searched for daycare websites, especially local ones, and most of them do have age group rates.

Here are some examples from local daycares:

Infant $38.50
Toddler $32.50
Preschool $29.50
Kindergarten $28.00
School-Aged $25.50

Infant (6 weeks to 18 months) $49
Toddler (18 to 30 months) $35
Preschool $34
School Age (full day) $32
School Age (before and after) $17

Full time (6 hrs or more)
Infant (Birth-18 months) $50.00
Toddler (15 months - 2.5 years) $44.00
Preschool (2 years-School Age) $38.00
Part Time (less than 6 hrs)
Infant (Birth-18 months) Not Available
Toddler (15 months - 2.5 years) $27.30
Preschool (2 years-School Age) $24.30

Ontario's average child care costs goes down as age goes up.

Most of the rates I could find on websites were for daycare centers though. Not all private daycares have websites and some don't have rates on the site. Maybe it's different for private home daycare.

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Originally Posted by sunnydays

I don't think there is actually that much difference in the care needs of a 12 month old and a 2 year old for example. The 12 month old has more physical needs like diaper changing, being fed, being held, etc. But the 2 year old has more behavioural, educational needs. A 3 year old will need more educational activities, school-readiness prep etc. I don't find one age more work than the other.

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You've got a point there.

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Originally Posted by sunnydays

And by the time they get a bit easier, they head off to school...LOL.

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Yup


Do any of you home daycare providers have different rates for different age groups?

I charge different rates based on age, but the reason for doing so is because I'm licensed and accept subsidy so I am required by the Manitoba government to charge the rate they set. I also get grant money per spot, on top of the parent fees (which are much less than other private home daycares here). This appears to be the only reason I've seen for anyone with home daycare to charge different rates based on age, otherwise they charge the same rate for all ages (other than school age). I won't bother listing my rates, as you are in Ontario and they would be much different than what you would charge.

Being licensed means I can take on more daycare kids, though there are rules on how many of each age I can accept. So I guess it balances out somewhat that I don't get the same amount of money for all the 8 spots I'm allowed to fill.

This would likely be similar reasons for the rates on the daycare center website you were looking at.

But if I were a private daycare I would charge the same rate for infant/preschool age and for school age.

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Originally Posted by FSD

Hi Mike. That seems a bit complicated to me. My prices are: $35 for a full day; $20 for a 1/2 day (if lunch needed, then they pay for a full day). I also have a 3 day minimum for part timers. For me, they all pay the same amount whether they're a baby or not.

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I feel the same. To complicated for me. My price is $31 a day for part time and no less than 3 days a week. Full time is still $31 a day, $155 per week. This price is for all ages.

I'm going to simplify my rates.

I would suspect the rates vary more by age in larger centres because they have strict rules about ratios of child care provider to # of children and are talking large numbers of children.
I care for 2 children in addition to my own 2 and I charge $50 per day, for a 9 hour care day. Some parents use the whole time and some don't, but even if they don't, they still pay for the full day. I don't do drop in or half days. The parents sign a contract for what days their child will attend and pay for that space. I also charge the same rate for all ages.

Same rate for all ages appears to be the norm for home daycare.

I'm in Halton area in Ontario, and many in my neighbourhood place a higher premium on children under 2 yrs, as the lowest licensed centre rates are about $60+ a day for infants, and $50-$55 for toddlers around here. I charge $5 more a day until they are 2.5(preschool age) and no parent has ever questioned that, given the high expense at centres. All of my preschoolers have been with me since infant/toddler age, and they are very self sufficient with following directions/tidy up/dressing in outdoor wear/climbing and running and walking in the neighbourhood/eating / scraping their dishes/are potty trained/have consistent nap routines/and I am not lifting and carrying them. I guess it depends how many little ones you have, and I have always stuck to the "2 under 2 yrs" rule even though I didn't need to. I have found a definite difference in the hyper-vigilance you need when supervising the under 2 years crowd, so I do charge more. I guess every provider's experience is different depending on the group you have at the time. And yes I know that there are preschoolers that are "handfuls" with behaviour too! The best guide is to search daycare bear with your postal code and average out the rate.

I found that I started out on the average end of rates, and as I got more established, or clients left, I slightly increased rates, or left rates the same for existing clients and added more paid vacation each year when my contracts renewed. The clients all stayed, and all new clients will pay the higher rate and some of my holidays too.

Mike, if you put in your postal code and search here on Daycare Bear for your area, that will give you a good idea of what others in your area are charging and whether they have different rates based on age. Where I am, I haven't seen anyone do that (except for centres) BUT this could change if the new bill goes through in parliament and we are only allowed 2 kids under the age of 2. Then I believe the majority of home daycares will put their rates up for the under 2 spaces as we will have a harder time filling our daycares and there will be competition among parents for those spots.

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Originally Posted by Busy ECE mommy

I'm in Halton area in Ontario, and many in my neighbourhood place a higher premium on children under 2 yrs, as the lowest licensed centre rates are about $60+ a day for infants, and $50-$55 for toddlers around here.
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and I have always stuck to the "2 under 2 yrs" rule even though I didn't need to. I have found a definite difference in the hyper-vigilance you need when supervising the under 2 years crowd, so I do charge more.
...
The best guide is to search daycare bear with your postal code and average out the rate.

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That's what's making it so much fun :rolleyes: deciding on a final price. I searched daycare bear and local yellow pages and kijiji ads and found most of the daycares with websites had prices based on ages. With daycare centers, it's obviously because of the limits. In business, that's supply and demand. I also plan on sticking with the daycare rules, or at least keeping close to them, in case I do decide later to go registered, or we are forced to. If I make prices the same for all ages, it would have an effect on what age ranges I would get.

I am going to simplify my pricing, but not overdo it.

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Originally Posted by sunnydays

Mike, if you put in your postal code and search here on Daycare Bear for your area, that will give you a good idea of what others in your area are charging and whether they have different rates based on age. Where I am, I haven't seen anyone do that (except for centres) BUT this could change if the new bill goes through in parliament and we are only allowed 2 kids under the age of 2. Then I believe the majority of home daycares will put their rates up for the under 2 spaces as we will have a harder time filling our daycares and there will be competition among parents for those spots.

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Good timing. My last reply pretty much covers that. :)

If anyone is curious how complicated my pricing is now, check the page on my site, (on my profile), but it won't be there long. I'm going to change it later today.

I read your homepage .... Wow !!!! You made the statement that "women often do child care because its all they know how to do or it's their only option". " some don't even like looking after kids and often do a poor job of raising their own children" .....
I think where your home page is concerned less is more !

Again, sorry, from personal knowledge, I know several that fit those descriptions, but I guess I only know those people, not the ones who count. I'm going to do some rewording there.

Ummm, yes maybe some re-wording is needed! I do childcare because I actually enjoy it and have always wanted to own my own business. This is not my only option but the option that best worked for me.

When trying to raise yourself up don't knock down others :) I'm sure you didn't mean to offend with that statement but trust me, you will offend many unintentionally!

Yes. Since I have no real daycare experience or contacts, and only know 3 people who do "daycare", I was assuming they were the norm. They don't actually do daycare. They just let others drop off their kids and charge for it.

I'm going to quit now for a while and do some changes on my site. :)

Just another thing that I thought about when reading your site. Will you accept children who are not in disposable diapers? When I was reading it, I sorta got the feeling that you look down on disposable and I think if I were a parent reading it, I would feel judged if I had a child in disposables. Just a thought...

I will have to take a look at that and reword it. I have nothing against disposables, just believe that overall cloth is usually better.

Things like disposables vs cloth, breastfed vs bottle fed, attachment parenting vs non etc are generally things that parents feel very strong about. They need to know that their provider will support their decision either way and still provide quality care.

I understand that you think cloth is better but that is one of those things that is a parent's choice and our opinion on it won't really matter to them. I would keep your personal opinion out of things like that, at least on your website. Just my opinion though, obviously do what feels right to you!

Thanks for the advice.

I'm a licensed family daycare in B.C. and in my area we're only allowed 2 under 2 yo so there is a demand for those spots, particularly for the12 m.o. age. A lot of daycares here don't accept 1 yo, I believe, because they do need so much more of your attention. Particularly if they don't walk. Therefore I charge at different rates for the 1-2 age group. I charge a little less for 4 year olds because they're usually in group centres by then so it's harder to fill that age bracket.

I don't do math I actually Hate it lol so I would't want to figure out the best plan for me etc as a parent. I charge $40/ day under 2 and $35/day over 2. If they come 1/2 day tough luck unless its a child who only uses 1/2 day regularly then they pay $20.

I'm simplifying my prices, as well as my entire website.