Advice needed about pricing, simple or complex

[Mike]

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?

[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.

[Secondtimearound]

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

[5 Little Monkeys]

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.

[Mike]

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.

[Crayola kiddies]

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.

[Artsand crafts]

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.

[AmandaKDT]

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.

[mimi]

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

[Busy ECE mommy]

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.