Lowering rate to attract potential clients?

[Fireyesblue]

I am just starting up and signed up my first family (who's awesome btw, wish I could clone them!) who starts beginning of January.

I am looking to take in 1-2 kids more only. I am a low ratio provider and advertise as such. All that being said, I am not getting any interest for NOW any and all interest has been for the New Year and even that has halted.

My rate is $38 day and that is what my January fam signed up for. At what point, do you consider dropping down to $35 in hopes to attract more families (if that would even make a diff!)?

Some providers here charge as low as $30, which is WAY lower than what they SHOULD be asking for our area (it's building and booming).

So.... thoughts on dropping fee? or do I remain hopeful and patient in hopes I snag one more family at my current rate? I am also wondering, if I did drop my rate, do I inform my current family that has signed on?

Thanks

[mickyc]

I started my daycare at a lower rate and slowly increased it. I started at $27 (my area averages $25-$35 day). I then increased to $30 for infants and $28 for over 2. I am increasing again next July to $30 for everyone.

I personally would maybe lower your rate but do not change your current families rate. They signed on at that rate so I wouldn't change it.

[Fireyesblue]

Thanks for responding! I was contemplating either adjusting my hours at first but perhaps lowering the rate may be the best way to go at this point. Thing is, I advertise a lot on facebook daycare groups, which is where all the interest comes from. I provide a link to my website, which has my current rate and hours but I often wonder how many people actually BOTHER to check it out. Lol

[5 Little Monkeys]

I was at $30 and raised it to $35. I signed on two families with that rate but one asked a month or so in if they could get a discount because they sent food due to an allergy. I lowered theirs to $32 and than needed to fill another spot. I couldn't get any more at $35 so I lowered it to $32. The second family who signed on at $35 hadn't started yet (they signed up a few months in advance because they were taking a mat leave spot) I didn't really need to lower theirs because it really is nobody's business what the other parents are paying but to keep it easy for me, I emailed her saying it was now $32 and of course they were fine with this lol. I now have everyone on at $32 except for a client whose been here 2 years as they are grandfathered in on a few things. A few know she pays this but they also know that if I raise my fee again their's will not increase. The rate you sign on with is the rate you will always pay. At the most I will only have a child here for 4 years so it's not a big deal to me.

I would leave your current one at $38 and if you feel that is what is stopping you from filling another space than lower it for any new ones. I lowered mine because it is just easier to do payroll (I have a terrible memory!! lol) but do sorta wish I had kept it at $35 from a financial standpoint.

[mickyc]

If you are going to have different rates for different families make sure and don't post your rate on your website. Once they contact you then you can give them your rate.

[Fireyesblue]

Gotcha! I just don't know if it's my rate that is deterring people (everyone seems to want to save a buck) or if its because we seem to be saturated with Providers (old and new) all whom seem to charge -35$ with myself and another who is also just starting out at $38. I would hate to take the hit if I don't have to. Lol maybe I should remove my rate and hours from my website...and if I get more inquiries, then I guess I know my answer? Lol

[5 Little Monkeys]

I see more and more charging $32 and $35 in my area so I do wish I had stayed but I needed to fill spots so I lowered it. I talk to a lot of parents and the general consensus is that most can't afford daycare over $30/day so I try to stay within competition but also have to stay in business!

[Rachael]

There's no right and wrong answer to this. Like Mickyc, this area averages lower than others ($30-$40 but that $40 would be downtown and inflated by demand).

It's hard not to panic when your numbers aren't where you hoped they would be. That I do fully understand as bills still need paying.

What I will say is now I've been in this business a long time, I never lower my rates. I don't negotiate on any other factor of my business either. In my experience, it can be tempting to take that child who needs an earlier start or a later finish or a sibling discount but I've regretted the instances where I have done it. Now I tend to sit tight and sure, it might mean a few extra months of having an empty place but for me that's better than potentially 4 years (if a child comes at 12 months) honouring an agreement for extended hours or lower fees.

And no - I wouldn't change the rate of the family who have already signed up. My current children are on different rates. When I increased my fees last time, I only did so for new clients and kept my old ones on their old rate. I might increase theirs at a later date if I need to but don't feel obligated to match all your clients rates/offer all a discount. The fees you are charging any client are no one's business but yours and that client.

It will come in time. I promise.

[mickyc]

when I raised my rate I gave everyone 1 year notice for new rate of $28 and then another 1.5 year notice for the additional $2. Any new families have all started out at $30.

I had thought of leaving their rate and only increasing for the new clients but decided to increase with lots of notice. I didn't have anyone leave due to an increase. Maybe the families are hesitant to book a spot with you because you are new? Do you have that posted somewhere? I found it was really hard to get new families at the beginning but now that I have been doing it for years people know I am committed.

[Fireyesblue]

Great suggestions, thanks! Thanks for the reinforcement too! I don't advertise anywhere that I am new or just opening (thanks to this forum!) in fact, most are surprised when they find out because I come across like I've been in the business awhile from my website. I have one great family starting January and so thrilled...seriously , great people. Just wish it was as easy to find more like them!