Raising rates

Hi
It has been a VERY long time since I have raised rates...been providing daycare for almost 29 years and am wondering how you deal with rate increases. Do you speak with the families directly or email notice home. I'm thinking of actually arranging my rates more or less like a salary rather than raising the rates a set $$...this is more beneficial to my families as they would be paying more if I raised my rates daily. Just curious how you handle this as most of my parents are always saying how much daycare cost them (yet pay more to board their pets, LOL)
Hope everyone had a great xmas and all the best in 2015.

In my contracts, I have the statement "There will also be times when it is necessary to increase the fees charged to parents. Parents will be given at least 14 days notice of this change."

I have a FB page for my current clients. It's used to communicate events, sickness within the day care, has copies of documents, events for vacation days etc. So, anything which parents need to be aware of, I add to this group.

Whenever I post anything within the group, it states "Seen by XX" and it tells me how many of my clients have seen it. Clicking on the number, tells me which clients have seen it and so I can bring it to the attention of anyone who hasn't.

I don't increase fees lightly but when I do, I make no apology for it. I simply state the fact, and when it will be effective from.


"Due to increasing costs, day care fees will be increasing to $xx.xx effective from <date of increase>. "

I decided that the only time I would increase rates is when I sign new families on. The rate a family signs on with is the rate they will always pay

My reasoning for this is...

* when parents are dc hunting, price is going to be a factor ( maybe not the deciding factor but still a factor) and they will likely budget for this

* at the most, a one child family will be with me for 4 years. I'd rather keep a good family than raise rates and risk them leaving. 4 years isn't a long time so the lower rate compared to new families isn't an issue for me

I don't raise my fee every time a new family signs on however. Likely every 3-5 years I will consider it though depending on my business costs and my local market. The only thing I haven't decided is if a family goes on mat leave and comes back with the 2 children (or even just the one), should I give them their original rate or the new one. There are some pros to having multiple children from one family so I'm leaning towards original rate but there are cons too and I'd loose out on a bit of money....hence the undecideness!! Lol

Quote:

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Originally Posted by 5 Little Monkeys

The only thing I haven't decided is if a family goes on mat leave and comes back with the 2 children (or even just the one), should I give them their original rate or the new one. There are some pros to having multiple children from one family so I'm leaning towards original rate but there are cons too and I'd loose out on a bit of money....hence the undecideness!! Lol

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I don't - if a family leaves due to mat. leave, then they leave. If they return, then they pay the current rate like everyone else. I also don't ever give sibling discounts.

Yes, there are pros to sibling groups but there are cons too. Siblings tend to have a mini-clique which excludes the other children, if a family moves/changes jobs it results in multiple vacancies, some clients with more than one child think they have more say in the business because they provide a larger portion of income than other parents etc.

Based on your whole answer, the most I would do is if they kept the oldest child in care for the whole maternity leave period, then keep the original rates for that child and the new sibling pays new rates. But if they leave, then when they come back, they pay current rates. After all, giving that place to a new client would mean being paid in full.

I don't give sibling discounts either but I guess if I kept both at the original rate, it would be a discount.

I see your point about them paying over the mat leave but I no longer offer this unless they want to risk it....I can't guarantee that I'll have 2 spots when mat leave is over so they can pay to hold one spot but that's about it.

I just recently raised my rates after 8 yrs...it was about time! After hearing dcp's getting better jobs, promotions and yearly raises, I figured it was about time that I gave myself a raise :)

I just sent out a letter at the beginning of December, stating that daily rates will be increasing from ___ to _____ per day, as of January 1st.

I don't give sibling discount anymore. I did when I first started, but now they pay the same rates as one child families. I found that the more you give discounts, price breaks or special treatment, the more those certain families take advantage.

Exactly.

We have limited spaces. A sibling doesn't get less love, less craft supplies or less food.

Why would I cut my income level to make someone else's expenses more affordable? When a client can go to a gas stations and fill two cars and get a discount, then I'll consider reviewing it. Until they, all clients pay full rates.

And yes, staying FT on mat leave doesn't assure them of a second place. All it gives them in my day home is priority over any second place that comes up during their mat leave - if it does. I don't hold the place without payment though. If a place comes up 6 months before they need it, then they pay for it or risk losing it.

Over the past 4 years that I have been running my daycare I have changed my rate a few times. I started out at $27 a day. I then increased it to $30 for children under 2 with those over 2 at $27. I then changed it to $28 and then to $30. I have always given plenty of notice and by plenty of notice I mean a year and a half lol. When I went to $28 I gave roughly 6 months notice. At that time I gave my notice to those same families stating that as of July 1, 2015 my rate would be $30. When I increased to $28 for existing families I increased my rate for any new families to $30.

I recently had a family who came back after a mat leave with the baby. I gave the same rate for the older sibling ($28 with a fee increase to $30 in July) and charged them the new rate of $30 for the baby. As of July I will have all kids at the new rate of $30. From there I will have to wait and see what those in my area do. I have started to see more and more increasing to $35 but I am sort of out of the way for most families and don't think I would be able to get any families if I went that high. Time will tell I guess.

As far as actually giving notice I just include the fee change in my new contract at the beginning of the year. Every January I sent out an updated contract (this year via email). I make note that there are fee changes so please read over new contract and let me know if there are any questions.

I think it is important to give as much notice as possible. I would not give less than 6 months notice. I couldn't imagine only giving 14 days. That barely gives them a chance to find new care if they can't afford the new rate. Just my opinion.

Quote:

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Originally Posted by mickyc

As far as actually giving notice I just include the fee change in my new contract at the beginning of the year. Every January I sent out an updated contract (this year via email). I make note that there are fee changes so please read over new contract and let me know if there are any questions.

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Can I just ask why you send out a new contract each year? Is it because you routinely increase the fees?

It's not something I've ever considered doing. I create a contract when someone comes with their days registered, start date, fees, etc and I only ever re-issue if something changes such as a fee increase (which I don't do annually) or change in days.

I always update my contract yearly. I make changes every year. Sometimes small, sometimes more important. Every year I have different families and little things come up. I know some provider's have a parent handbook but I don't. It is all in my contract. This year along with the fee increase as of July 1st I have also increased my late payment fee as well as my late pickup fee. I changed my policy regarding potty training and reworded some of my other parts (I love this website!!).

I do the same as mickyc. There are times I add or reword my contract and I send out the revised contract at year end. However, This year I had no major changes so didn't bother

Oh that makes sense. Like you mentioned, I have a handbook as well as a contract. Thanks

I only raise rates for new families coming in based on current rates in my area. Even a dollar a day ads up nicely.

As to the maternity leave my policy has been if older child stays full time during mat leave baby comes in at same rate too. If older child stays part time they come back at same rate but baby comes in at new rate (if I am raising rates that year). If older child is pulled out totally but they want spaces they both come back at the higher rate. This would assume I had openings coming up either due to others leaving for school or starting a mat leave and older child must start back at least part time as soon as opening comes up ex for Sept even if mat leave for baby doesn't end till November. Chances are I would just replace them and assume they were going to make alternate choices down the road but let them know they are free to contact me closer to care being needed to see if I have spaces.