How to compete with those whose rates are less?

I've been doing my research and there seems to be a lot of long-time daycare providers in my city and in my neighbourhood who I don't think have ever increased their fees. I don't know how they can even afford to charge what they do. The problem is that it makes it hard for us "newbies" who are charging a normal, fair rate. We're competing with those who not only have more experience, but are charging much less for the same services. In one case, I actually spoke to a lady who has been doing this for 30 years and she charges $200 less per month than what I charge. When I commented that her rates were so reasonable, she said "Dear, I thought I was charging the same as everyone else. Are people charging more?" LOL. Of course, she seemed as sweet as can be and if I were looking for childcare, I'd probably send my own kids to her in an instant.

Any suggestions for how to complete with those who charge less than you do? Or do I just wait until their spots fill and then hopefully people will come my way? :)

While some families need and want that lower rate there are plenty of families out there that recognize this career costs money to run and it deserving of a decent pay.

All you can do is offer your best, present your best and sell your best. Families will come along that respect and value that.

Don't bother trying to compete with others who undercut the market price. There is a need for all prices of care. If you run a quality program, then charge accordingly. Don't undervalue yourself!
Quite often the ones that undercut the price are running a sub-par program/not following the laws/not declaring income etc. Not always the case, but more often than not.
If you're just starting out, you might go $1-2 dollars a day less than the norm to build your first couple of clients, and then come up to the average as you take on more clients.

Are these providers following the new ratios or are they still back in the 80's along with their rates? ..... In my opinion (and there are a few in my town also) these grandmotherly type providers can charge these low rates because A) they don't have a mortgage and are truly just doing it for a bit of income (which they aren't likely claiming) or B) they are wearhouseing kids and can afford to charge less because they have way more then allowed..... Or both !!!

I agree with crayola kiddies. There are some who still refer to themselves as the "neighbourhood mom" or "babysitter" and they either don't know or don't care that the rules have changed. They take on more than they are allowed and still charge the low rate. I do think that some are perfectly capable of this BUT it's not legal anymore.

Than there are some who do this for extra money and feel that childcare is expensive so they can afford to offer lower rates. I think this is great for lower income families but it does make it hard for those of us who do this to make a profitable living. I don't think they realize how it hurts the industry though and they just wanna offer affordable daycare. Hard to fault them for that.

Some who charge lower will eventually find out that it's not profitable and will either raise fee's or quit. Others will be able to continue at lower fees due to other resources of money. There's nothing you can do except make your daycare the best that you can and get your name out there. I don't think necessarily that fees are directly related to quality of care but in some cases it is and parents will soon realize this and look for a different provider.

These same grandmotherly type that have been doing it for 30 years likely don't have a contract but they don't worry about any one leaving cause they will never find a better rate

I never really understood the concept of this or how people get away with it so if anyone can explain PLEASE do. Before I ask my questions I just wanted to inform all providers that do it illegally that the risk isn't worth it. There is a provider in our neighborhood who just got inspected by the ministry. She not only was over the 5 limit but wasn't following the 2 under 2. This women got charged $2000 per day PER child she was over limits with and then another $2000 per day per child that was not in compliance to the 2 under 2. This women now owe $48 000 to the ministry in fines!

My question is how the CRA doesn't figure it out? I know parents who have gotten "cheaper" care "without"receipt s but went behind the providers back and claimed knowing they could but the provider never got in trouble?

I also know of another provider who gives out those receipts from receipt booklets and never claims/parent do but never gets in trouble and don't pay a $1 in tax?

How are these people getting away with it? As for the Kingston area, providers who are operating illegally be very careful because I have my eye on you and best believe if I see any illegal activity I will pick up the phone an sing like a canary!

Have you picked up the phone and sang like a canary ...for the person who gives receipts but never claims/parent...and doesn't pay taxes....start singing!

I did as a matter of fact :) But my question would be how the CRA doesn't find these people on their own if parents are claiming??

Quote:

---

Originally Posted by bluebirdfollower

I did as a matter of fact :) But my question would be how the CRA doesn't find these people on their own if parents are claiming??

---

Until one of the families or the daycare provider gets audited the CRA wouldn't connect the receipt to the provider. Pretty sure it all just gets plugged in but isn't connected unless someone raises a red flag and they dig in.

Quote:

---

Originally Posted by bluebirdfollower

I did as a matter of fact :) But my question would be how the CRA doesn't find these people on their own if parents are claiming??

---

someone needs to complain about them to give a heads up to the inspectors and I think it is up to us to make that phone call as I can't see the parents who get the low rate complaining to the officals

We all have a max amount of money we can make and I assume all our accountants know this and I wonder how that doesn't raise a red flag for some. I know the cra sees our income after deductions but if we get audited, that will come out and I assume that provider would be in trouble??

"We all have a max amount of money we can make"??????? We can make as much as we want as long as we follow the rules

I think she means we charge "X" per day and can only have so many kids so we are limited to how much we can make when following the rules.

Sandylynn, there is still a max amount of money we can make though. $fee per day x number of kids allowed x number of business days in a year

I get it! Lol

True, but some providers, will take kids on 24/7, so they could earn much more then thoses of us who find normal 40-50 hr work weeks long enough. I knew a few ladies around here that would do evening and overnight and weekend and holiday care. they would charge much more to those hours, and still work all week. Personally as a parent, off time is important, and that would not impress me. There is no rule as to maximum hours one can work is there?

They would still have a max amount they can make though legally

Quote:

---

Originally Posted by 5 Little Monkeys

They would still have a max amount they can make though legally

---

Really?? Is there? I'm a 24/7 daycare and claim all my earnings never had a problem. Why would there be a max? They say u can only make 40,000$ Or something a yr? if u make more it's illegal? Not being rude, just honestly wondering. Lol. It's weird to put a max on it, no? I haven't heard of that.

U can make as much as u can as long as u never go over ratios and age restrictions and claim it all!?!?!?

Quote:

---

Originally Posted by babydom

U can make as much as u can as long as u never go over ratios and age restrictions and claim it all!?!?!?

---

Yes, that's exactly what I mean. There's still a max though. You can only have a set number of children throughout the day (whatever your hours and ratio are) times the fee you charge :)

For 24/7 daycares, it would be easier to go over ratio though since I'm sure you are never near your max dollar amount per year as I'm assuming you are never 100% full 24/7? They wouldn't know that you are running illegally at times. (Not saying you do! Haha)