Oh, well isn't that nice......NOT!

[cfred]

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

[5 Little Monkeys]

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?

[cfred]

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.

[ttremble88]

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.

[Mike]

I am looking into raising my rates come the new year now that I have made a name for myself.

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'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.

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.

[cfred]

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.

[Spixie33]

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 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.

[cfred]

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.

[ttremble88]

Wowzers! $15?! Here I thought that you meant $20-$25.....lol!

[Crayola kiddies]

Wowzers! $15?! Here I thought that you meant $20-$25.....lol!

Cfred meant $15 under the going rate not $15/day