Am I Charging Too Little For My Time?

[MarinaVanessa]

Lately I have been feeling that maybe I should raise my rates. I haven't for a few years because of the way the economy has been and I've been afraid that parent's might look for care somewhere else. But I'm pretty sure that my rates are low. Not exactly sure because the only other providers that I know personally willing to talk to me about how much they charge are #1 an ex-pre-school teacher that follows a curriculum close to that of the school system, is a large (12 kids) home daycare and has her masters in child development. #2 has her bachelors in child development, a degree in special needs children and caters only to special needs kids. I charge lower than what they do #1 charges $200 a week flat no sibling discounts. #2 charges more than that but because she has special needs kids that need nurses, round the clock care, medication etc. so they are a bad comparison.

Currently I live in a middle/upper part of town, have frequent park days (with either of the two other providers I know), nature walks, field trips (museums, fire department, county fair, free crafts workshops etc) and all usually at no additional cost to the parents because most of these are free and I can write off the gas and mileage.

For full-time (35-45 hours, 5 days a week) I charge $170 (infants) and $150 for the rest weekly. For part-time (35- hours a week, up to three days) I charge $150 (infants) and $136 for the rest weekly. It is a flat fee that I charge regardless the child is brought or not. I offer drop-in care as a seperate charge (for people already in my care or not) at $5 an hour and a minimum charge of $20, any time a child stays later than my business hours(after 6pm) the rate is $5 an hour and I also offer weekend care on an ask-for basis at $5.50 an hour and a minimum charge of $30.

I make my own curriculum form online teacher websites and workbooks etc. from stores like Lakeshore, have daily craft or art activities etc. In other words I keep my DC littles active all day with educational activities. We're not hurting for money and business is good but lately the other two providers have been encouraging me to raise my rates and feel inclined to agree. Problem is, I don't know how much. Help? How much more should I charge? And at what rate should I increase my rates? I don't want to scare any parent's off and want to do it gradually. And how should I approach the parent's in a tactful way?

[gbcc]

I think it depends on where you live and the class of families in your are.

I live in a middle class neighborhood, (houses are 120K-200k, rent is $550 for 1bdrm, $900 house) do circle time and keep kids active all day. We have wkly field trips at no cost to parents. I charge $140 for infants and $130 for others. It is hard to find people to pay that. Many in my area will charge $100-$125. I want the better class of clients so I charge more to keep the DSS clients and parents who change jobs often out of my daycare.

Now the next town over where homes are 80k - 100k charges $80 - $100 for daycare.

[laundryduchess@yahoo.com]

I personlly dont ever raise my rates, I raise them on new clients. The parents think they are getting a deal. and noone is the wiser. =-) and I get raises once a year or so when a child ages out and a new one comes.

[momofboys]

Originally Posted by laundryduchess@yahoo.com

I personlly dont ever raise my rates, I raise them on new clients. The parents think they are getting a deal. and noone is the wiser. =-) and I get raises once a year or so when a child ages out and a new one comes.

That's great that you can do that but since I will likely only have one or two families, at most, at a time if I don't raise them at some point I will probably lose $$$$. If I could take on more families I probably wouldn't raise them.

[MarinaVanessa]

Originally Posted by gbcc

I think it depends on where you live and the class of families in your area.

This is a good point, in my city houses in the bad side of town (near the projects and housing authority) houses are in the mid $200,000's. Where I live they are going for the mid to high $400,000's.

I do however accept subsidized childcare. It's hard for parents around here to live off of their pay (alot of people are in their 20's and single parent's like myself). The great thing about subsidized childcare is that they always pay. If clients are on subsidy and they are terminated I get a letter stating when and as of that day I make sure not to acccept a child unless they pay for the next week up front (I always expect payment in advance of care so that I don't worry about non-payers) except if they are on subsidy.

The thing is that I'm new at home-daycare (2 years) and I have the same clients now that I did when I first started. I have good clients that love my daycare and I don't think they are leaving. #1 is family from my daughter's side and her two boys, #2 is an ex-coworker that I worked with for three years and her daughter and #3 is a friend and her daughter which I've known since high-school. That's four slots plus mine which leaves only one open which I've intentionally leaving open for when myself and my fiancee have our own. I don't think that any of my parent's are going anywhere anytime soon so that would mean I'd have to wait a few years to raise rates

[Carole's Daycare]

I typically charge $10/week higher than DSS pays. I do offer second child discounts for cash pay in advance families. It does dissuade some DSS clients, but not all. They simply have to pay the difference in my rate and what the county pays in advance along with their copay. My husband being a cop and having the local county child protection worker's children in my care keeps away the real bad apples, but I have had and do have families who get laid off etc. When that happens they are pay in advance, so they pay their two weeks notice, and I give them the option to use it up, or save those 10 days for space available drop in "mental health days" or job search, interview and first days back on the job waiting for pay situations. I have kept some of the same families for 6 years, most at least 2 or 3, but I get maybe one new family per year based on moving up to school age, moving out of town etc. I haven't raised my rates in several years either due to the economy. My area, according to our local resource and referral, has twice the number of daycares and twice the number of openings as a city 3 times our size a couple hours away. Technically there is a real glut in the market, so to speak, so parents have a lot of choices. In addition we have several centers. Most of our area churches have a daycare run out of their nursery/childrens church areas during the week, as well as a few non-church centers. Of the home providers, I am one of about 40 that have anything beyond a HS education. I am also one of the very few that offer a truly exceptional preschool program and have the training to back it up. I have talked to my families about the economy, how my costs have increased and my rates have not, so they are willing to contribute craft supplies, outgrown toys, and occasionally a mom brings a gallon of milk or canned fruit that she had "extra". At this point I dont think if I raised by rates a few dollars anyone would leave that is here, although it might dissuade newcomers if I needed them. Over 30% of our county's population is classified as "working poor". I just know my families can't afford it, so instead I'm looking for ways to increase my profitability by cutting costs without compromising the quality of our program.

[momma2girls]

It certainly depends on where you live, and what city you live in. Where I live the going rate is $125.00-$215.00 a child. The centers/preschool charge the $215.00 for an infant! I have not raised my rates in over 3 yrs. I have been thinking about it, but I haven't yet, possibly next yr. I used to have the same rate across the board for everyone, but now I went down $10.00 a week, for ones that are completely potty trained. I do still give a sibling disc. which I know of many, many daycares do not!!!

[originalkat]

I am in the midwest and charge $125 per week. I think people are looking for $100 per week from a home daycare around here so I get a lot of people who do not call back. I just wait for the ones who are willing to pay more for education/experience/curriculum. It has been worth it to me.

[momofboys]

Originally Posted by MarinaVanessa

Lately I have been feeling that maybe I should raise my rates. I haven't for a few years because of the way the economy has been and I've been afraid that parent's might look for care somewhere else. But I'm pretty sure that my rates are low. Not exactly sure because the only other providers that I know personally willing to talk to me about how much they charge are #1 an ex-pre-school teacher that follows a curriculum close to that of the school system, is a large (12 kids) home daycare and has her masters in child development. #2 has her bachelors in child development, a degree in special needs children and caters only to special needs kids. I charge lower than what they do #1 charges $200 a week flat no sibling discounts. #2 charges more than that but because she has special needs kids that need nurses, round the clock care, medication etc. so they are a bad comparison.

Currently I live in a middle/upper part of town, have frequent park days (with either of the two other providers I know), nature walks, field trips (museums, fire department, county fair, free crafts workshops etc) and all usually at no additional cost to the parents because most of these are free and I can write off the gas and mileage.

For full-time (35-45 hours, 5 days a week) I charge $170 (infants) and $150 for the rest weekly. For part-time (35- hours a week, up to three days) I charge $150 (infants) and $136 for the rest weekly. It is a flat fee that I charge regardless the child is brought or not. I offer drop-in care as a seperate charge (for people already in my care or not) at $5 an hour and a minimum charge of $20, any time a child stays later than my business hours(after 6pm) the rate is $5 an hour and I also offer weekend care on an ask-for basis at $5.50 an hour and a minimum charge of $30.

I make my own curriculum form online teacher websites and workbooks etc. from stores like Lakeshore, have daily craft or art activities etc. In other words I keep my DC littles active all day with educational activities. We're not hurting for money and business is good but lately the other two providers have been encouraging me to raise my rates and feel inclined to agree. Problem is, I don't know how much. Help? How much more should I charge? And at what rate should I increase my rates? I don't want to scare any parent's off and want to do it gradually. And how should I approach the parent's in a tactful way?

It truly depends on where you live. Your rates are high for my area in the midwest. Most providers in my area who do in-home caycare charge anywhere from $20-30/day. I charge on the low end of that number. When I had a child/children in home daycare myself I was also charged in the same price range & that was SEVEN years ago! I have found out others' prices by calling ads that I see & pretending to be a prospective client or just calling local centers & doing the same. If you think you are deserving of a higher rate I would just do it, especially if you have clients for a while & have not risen your rates. I'd just type up a letter & say effective March 1st my rates will be. . .
If it were me & I plan to do this at the start of the new school year in the fall I will raise my infant/toddler rates $2/day ($10 week) & for everyone else (before & after school care) their rates will also go up $2/day. I have a Bachelor's degree & do lots of activities with the kids I figure I'm well worth it!

[MarinaVanessa]

Originally Posted by janarae

I have found out others' prices by calling ads that I see & pretending to be a prospective client or just calling local centers & doing the same.

I don't know why I never thought of this. This is a great idea! I'm telling you, sometimes I don't think of the obvious. I'll call around and just see what the rates are for people in my area.

[Chickenhauler]

Originally Posted by gbcc

I thought so! I shouldn't laugh at their expense but parents are so quick to screw us that I do love a little justice!!

I wouldn't say they wanted to "screw you"....they didn't want to pay for 5 days care when they only needed two.

Would you be happy paying for 500 cell minutes per month when month after month, you only use 200?

[Lucy]

As the others said, it depends on the prevailing rate for your area. Look through the classifieds and call a few of the providers as if you were looking for care for your children. That way you can find out what others are charging. Sneaky, I know, but you need to know what others are charging.

That said, at $30/day, you are higher than what providers in my area are getting. I'm in a town of 15,000 that is a mix of urban & rural and is south of Portland, Oregon. We're about $25/day.

[momofboys]

Originally Posted by MarinaVanessa

I don't know why I never thought of this. This is a great idea! I'm telling you, sometimes I don't think of the obvious. I'll call around and just see what the rates are for people in my area.

You have to be careful these days though with caller id etc. I live in a small town too. I just say I am considering a job & need to find out pricing & then I price my child (he's 2) & adk about before & after care for my older boys. So it isn't a lie really b/c who knows when I could get the "perfect" job!

[Persephone]

Originally Posted by janarae

You have to be careful these days though with caller id etc. I live in a small town too. I just say I am considering a job & need to find out pricing & then I price my child (he's 2) & adk about before & after care for my older boys. So it isn't a lie really b/c who knows when I could get the "perfect" job!

I use my cell phone, because that normally doesn't show a name. Sometimes there's a code you can type on your land line to block the caller ID.