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.

[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!

[5 Little Monkeys]

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)

[Crayola kiddies]

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

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

[cfred]

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.

[Spixie33]

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.