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-   -   Thinking of Rate Change.. (https://www.daycare.com/forum/showthread.php?t=19486)

meli829 09-19-2010 04:45 AM

Thinking of Rate Change..
 
Here's my situation...

I'm a new daycare provider and have just recently opened up my daycare. I have never had a daycare before but I have been caring for children for years. All of my jobs from junior high through University have been with children including nanny positions. I am a few credits short for my Psychology University degree, however aside from the regular CPR/First Aid, Police check, I do not have any other qualifications.

For this reason when I started out I set my rates very low, and didn't realize how low until I joined the local child care provider resource network. I am charging about $10/day below the lowest average for my area. Some Daycares are charging anywhere from $10-25/day more than I am.

I have two families with me now and realize how little I am actually making once I buy food, supplies etc...

My other families (4 children total) are not starting until November (1) , February(2) and March (1).

I am thinking of keeping my current families on the same rate at least for a bit, and raising the rate for the other families and letting them know now so that if anyone decides they want to leave, I can find another family willing to pay the new rate and maybe even start sooner. I did not charge the families anything to hold the spot either which I am now regretting.

Is this a bad idea to raise the rate even though they haven't started yet?

I am thinking of a $5/day increase, is this too much? What would be a reasonable rate increase?

I would hate to loose these families because of an increase, but I would probably be able to get new families to pay the new rate and sooner so I'm not sure what to do.

Live and Learn 09-19-2010 01:53 PM

It might be easier to ask your parents to send lunches than to pay a higher rate at this point. I have found it best if I make changes over a long period of time. When I started out my rates were lower but the parents provided lunch. After I had a full program and a waiting list I raised my rates by $5 a day. At that time I also changed my policy to being paid even when their kids are sick or absent. I had one family drop me at this time but I replaced her right away. Last year I changed to getting paid before I provide childcare. Having said all that...I suppose that you could approach the families that haven't started yet. If two families agree to the rate increase then you might make the same watching fewer kids at the higher rate then you would watching more kids at the lower rates.

tymaboy 09-20-2010 06:04 AM

I personaly would not raise my rates right away. I would raise them come your 1 yr anniversary. Then when you do that do not raise them alot, unless you want to take the chance of loosing familys. I would do as suggested & ask the families to supply meals & snacks. If they question it explain why. Any new families signing on then you may try a higher rate but then you take the chance of the parents getting friendly & finding out that 1 is paying more then the other & it also becomes more difficult at keeping track of who pays what rate.

thatgagirl 09-20-2010 03:17 PM

raise them in Jan...I give out new contracts in dec, in your case I would give them out Oct/Nov and inform them of the rate change, also contact the parents you are holding spots for, also inform them you will be charging them to hold the spot XX amt otherwise I can PROMISE you that 1/2 of the kids you you held spots for, won't even exist come Nov/Feb/Mar because they had no obligation to you

meli829 09-20-2010 03:28 PM

The families I am holding spots for have paid me a week's fee as a deposit that is non-refundable. Do you think this is enough?

legomom922 09-20-2010 06:04 PM

In my opinion, I wouldnt raise new famlies rates if they havent started yet! Thats like bait and switch to me. Raise them on their 1 yr anniversary. Thats what I do. Every contract is renewed on their 1 tr anniversary date, and if the parenst do get friendly, I have a very good answer!

Abigail 09-20-2010 09:18 PM

Originally Posted by legomom922:
In my opinion, I wouldnt raise new famlies rates if they havent started yet! Thats like bait and switch to me. Raise them on their 1 yr anniversary. Thats what I do. Every contract is renewed on their 1 tr anniversary date, and if the parenst do get friendly, I have a very good answer!

What is a good answer if the parents get friendly?

To the original poster, how high are your current rates? Are you still in the process of being licensed or did you get licensed after you sign on those families who start in the future? I would say a small increase come January for every family is acceptable if you're now licensed. Keeping everyone's rates the same seems much easier to keep track of too! The parents have probably checked around and know that you're under the average, so don't sell yourself short if you have great things to offer! If you raise rates come January, I wouldn't raise them again for a year. Good luck!

legomom922 09-21-2010 03:27 AM

The good answer is "when their one yr renewal is up, their rates will be going up too";)

Current famlies and famlies who have already signed a contract, I feel should stay the same, and new clients could pay more. It's kinda like going to a restaurant, you order a meal and its 12.95 and think hmm thats within my budget, but then how would you feel if then you got your food and the bill was 16.95? Or how about you order cable tv and you sign up thinking its $45 a month, and then you get notice it's $55 when they come to install it...Just my opinion.


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