Pretty sure most parents already understand that expenses grow each year and that it is only the natural progression for any business to need to charge more or do less for the services they provide.
I raise my rates as needed. Over the last 20 years I have raised my rates several times. Some times those raises were closer together than others and once I went 6 years without raising rates a single cent.
What I do though when it is time to raise rates is say something like ".....like anything having to do with the economy, there is an ebb and flow and what I am currently charging and/or bringing in as income is no longer enough to continue to provide the type and level of care you are accustomed to so I have made the decision to raise the rates I am charging for my services."
Then I let them know when and how much.
Sometimes if the rate is a big change, providers ease into it by raising the rate in small increments over time until they are at the desired rate.
Other times, providers just say the new rate will be $xxx and will start on XXX day.
I would definitely NOT over-explain to parents why you are raising rates, but I would maybe try and show them that your rates are currently well below the norm for your area so that parents know that if they choose to leave because of the rate change, they probably aren't going to find anything cheaper.
Sometimes, you just need to do what you need to do (financially) to survive and hope for the best. You may have parents leave and you may not. There is NO guarantee in this business so all you can do is do what works for YOUR family budget and let other's do what they need to do for theirs.
