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-   -   11 Years & I've Never Raised My Rates! (https://www.daycare.com/forum/showthread.php?t=74005)

KatieG 10-03-2014 11:03 AM

11 Years & I've Never Raised My Rates!
 
I know I should've been doing this all along, but I've never raised my rates in the 11 years I've been in business. It's definitely time, but I'm not sure what is a reasonable increase? I googled "inflation rates" and found this:

http://www.usinflationcalculator.com/

It says that the cumulative rate of inflation from 2003 to 2014 is 29.3%!!! Obviously I'm not going to hit my families with a nearly 30% increase, but I don't know what is reasonable. I've done some poking around, and other providers in my area are charging 20-25% more than I am, so I don't know that they'd be totally shocked. Advice please?

EntropyControlSpecialist 10-03-2014 11:04 AM

Can I ask what is your rate, in dollars, and what is the range of rates of other in-home providers AND centers in your area?

KatieG 10-03-2014 11:38 AM

I charge $100/week/child for full-time. I don't have any part-timers. I am currently watching a 2yo boy, 13 month old girl, and 12 month old boy.

From what I see on Craigslist, other in-home providers are advertising $25-$30/day.

I checked with Kindercare here, it's $206-215/week for a 2yo, and $229-$232/week for a 12 month old.

A local church also has a daycare, they charge $180/week up to 12 months, $170/week 12 months - 3 years.

EntropyControlSpecialist 10-03-2014 11:42 AM

Then a MIN. I would be charging, if I were you, is $125/week. :) You are worth it.

KatieG 10-03-2014 11:49 AM

How much notice should I give them? If I let them know today that I'm increasing as of November 3rd, that's enough time, right?

melilley 10-03-2014 11:50 AM

Rates are about the same around here. We have a Kindercare here and rates are similar, maybe a little higher.
Legal in home providers here charge $100-$175 from what I've found. I used to charge $130 and have had no problems getting families. I just recently raised my rates to $140 and have implemented that rate with 2 new families and am going to raise the rates for current families to match new families, in January. I get calls all the time at the $140 rate.

I agree with EntropyControlSpecialist, the minimum I would charge is $125, but I be you could charge more! :)

melilley 10-03-2014 11:51 AM

Originally Posted by KatieG:
How much notice should I give them? If I let them know today that I'm increasing as of November 3rd, that's enough time, right?

That sounds like more than enough time. I have it in my policies that I will give a two week notice to any changes (as long as they aren't related to licensing) so your notice sounds like more than enough time!

KatieG 10-03-2014 12:21 PM

I'm going to give them a letter at pick-up today. How does this sound:

Dear (Families),

I have been a Child Care Provider since June 2003. In the almost 11 ½ years that I’ve been in business I have never increased my rates, even though the cost of nearly everything else has risen significantly.

Beginning Monday, November 3, 2014, my weekly rate for full-time care will increase to $125 per week per child.

Thank you for understanding this necessary change.

Sincerely,
(Me)

KIDZRMYBIZ 10-03-2014 12:32 PM

The rate range is huge, and it all depends on what is offered. The last time I checked about 7 years ago, around here, centers are around $200/wk for infants, and around $160 for older children. In-home is anywhere from $85-$160/wk, depending on age, area, and how much is being offered (licensed, nutrition program, preschool, etc.). I offer all of it under the sun, and charge $135 for babies, and $115 for older kids.

I would suggest for you to increase now by $15 per week. That is not a lot of money, but will add up nice for you. Two-weeks notice is plenty. Just a short note of the change is all that is necessary. Your DCFs know the freaking awesome deal they've been getting, and won't be surprised. Then, I would up it again in January to where you want it, with a chart that compares your rates and what you offer with everyone else. With 2-weeks notice again. You don't want to give them too much time to shop around.;)

When I did my rate increase, that's what I did. It took some sleuthing, but it was worth it, and no one could argue that they were still getting the best deal around.

KIDZRMYBIZ 10-03-2014 12:36 PM

JMO:

I don't think the DCFs would care if your rates haven't changed in 11 years. They weren't there then, and all they care about is how much THEY have to pay NOW.

I think a chart comparing yourself to others in your area shows them they are still getting a good deal.

And then showcase anything new for the business so they can see how their child is directly benefitting from the extra pay.

NeedaVaca 10-03-2014 12:42 PM

I would do the rate increase for the full amount, I would find it odd as a parent to get a rate increase in Nov and again 2 months later. I like your letter and not raising your rates in 11+ years shows the families that you don't do increases very often.

KatieG 10-03-2014 12:45 PM

KIDZRMYBIZ, that's sort of what I thought too...a sudden 25% increase would be shocking, but 15% is probably doable. I know I'm *worth* more, but I don't want to send them packing, or maybe worse, stay and resent me. KWIM?

Originally Posted by KIDZRMYBIZ:
I would suggest for you to increase now by $15 per week. That is not a lot of money, but will add up nice for you. Two-weeks notice is plenty. Just a short note of the change is all that is necessary. Your DCFs know the freaking awesome deal they've been getting, and won't be surprised. Then, I would up it again in January to where you want it...


TwinKristi 10-03-2014 12:55 PM

They should be thankful their childcare prices are reasonable. I charge twice what you do for FT infants! But I live in a very high COL area.

cheerfuldom 10-03-2014 02:04 PM

Increase. if the parents dont like it, replace them. you cant work at $100 a week forever. if they stay and give you attitude, interview a replacement and then term. anyway you slice it, you win, more income for the same amount of work. I wold do another increase in 6 months.

EntropyControlSpecialist 10-03-2014 02:15 PM

Originally Posted by cheerfuldom:
Increase. if the parents dont like it, replace them. you cant work at $100 a week forever. if they stay and give you attitude, interview a replacement and then term. anyway you slice it, you win, more income for the same amount of work. I wold do another increase in 6 months.

Absolutely. happyface

rosieteddy 10-03-2014 03:12 PM

That letter is more than reasonable.If parents decide to pull then I would interview right away.I also would charge any new families 150.00 .You may even want to let your currant clients know new people will pay a higher rate.The cost of utilities,food and supplies really do warrant an increase.Good luck.

KatieG 10-03-2014 04:16 PM

Thanks ladies! I've decided to think on it over the weekend & give them notice of an increase on Monday.

biglou 10-06-2014 05:23 AM

Originally Posted by KatieG:
I know I should've been doing this all along, but I've never raised my rates in the 11 years I've been in business. It's definitely time, but I'm not sure what is a reasonable increase? I googled "inflation rates" and found this:

http://www.usinflationcalculator.com/

It says that the cumulative rate of inflation from 2003 to 2014 is 29.3%!!! Obviously I'm not going to hit my families with a nearly 30% increase, but I don't know what is reasonable. I've done some poking around, and other providers in my area are charging 20-25% more than I am, so I don't know that they'd be totally shocked. Advice please?

Ms. KatieG

I believe your current families will not be interested in you failing to increase in 11years and asking them to increase by 25% can be shocking. I suggest you have a backup plan to any objections from current families. If someone objects strongly and you feel they will go and you want to keep them offer a 15%increase now with a 10%increase to follow in 6 months. Any new family gets new rates of course. In future, consider raising rates every three months as new families enter your program. Sure it will be a small increase but you are always hedging against inflation this way. Existing families need rate increases at least one time per year. If you don't ask you will never get it. Don't be afraid.

Big Lou.

Unregistered 10-06-2014 01:42 PM

Originally Posted by KatieG:
I charge $100/week/child for full-time. I don't have any part-timers. I am currently watching a 2yo boy, 13 month old girl, and 12 month old boy.

From what I see on Craigslist, other in-home providers are advertising $25-$30/day.

I checked with Kindercare here, it's $206-215/week for a 2yo, and $229-$232/week for a 12 month old.

A local church also has a daycare, they charge $180/week up to 12 months, $170/week 12 months - 3 years.

I charge 300 per child. I give discount to parents with two children, 25 dollars off per child.

BrooklynM 10-06-2014 02:06 PM

I would also note on your letter, that for any new families coming in, your new rate will be 150 per child, so they feel like they are getting a good deal.


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