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Daycare Center and Family Home Forum>Rates - Finding the Right Amount to Charge
BigLittleHomeDaycare 07:15 AM 07-16-2014
I opened on June 2nd. I have two part time children. I need to get some full time kids in.

I was charging $38 per day or $190 a week for full time. Potential clients ask the price but then I would never hear from them.

This week I lowered it to $32 per day or $160 a week - I live in a very diverse area income wise. (Second largest city in Illinois) There is section 8 housing within 1 mile of my home, but half million dollar homes a block away. So the income levels are all over the place.

I'd kept my rate higher so I wouldn't have to raise it on my parents. But I'm realizing I must be over priced. I am in a great location. I do know some people charged $150 a week but they were not licensed.

I will be licensed in August.

Any thoughts? Did any one else have to raise or lower prices?
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bklsmum 07:39 AM 07-16-2014
When I first started I had very low rates to be able to fill the spots and get going. After I was full and fine tuning the group I advertised at a little higher rate for new kids. Once I had a good group and a small wait list I raised the rates for the parents who had started under the lower rates. It was about a six month process but it let me fill up and worked out well for my parents too. There was very little fuss.
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BigLittleHomeDaycare 07:48 AM 07-16-2014
Originally Posted by bklsmum:
When I first started I had very low rates to be able to fill the spots and get going. After I was full and fine tuning the group I advertised at a little higher rate for new kids. Once I had a good group and a small wait list I raised the rates for the parents who had started under the lower rates. It was about a six month process but it let me fill up and worked out well for my parents too. There was very little fuss.
I like this idea. I think I would be comfortable with raising rates after a while if I start lower. I think they would understand. Plus, I know a few dollars adds up over time, but to raise by a dollar or two doesn't sound as bad.

Thank you!
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Childminder 07:49 AM 07-16-2014
Contact your local child care resource and referral association, you probably can link off of your State licensing website. They will be able to give you a median price for your area as well as many resources to tap into.

I am in the middle of one of the wealthiest counties in Michigan with all big three automotive companies based here and in 2004 charged $160, raise to $175 in 2008 just before the bottom fell out. Last year I lowered my rates back to $160 and still can't find kids.

Two weeks ago one of three centers within 1 mile of me closed. Three years ago there were 17 home family day cares in my zipcode now there are 9. The unlicensed SAHM's are charging 1/2 of what is charged in homes and 1/3 of what is charged in centers. If you want to be competitive you might check craigslists going rates.
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hope 07:57 AM 07-16-2014
I like to think that you can get kids if you have a niche. Sure, many people only care about getting child care at the lowest rate but you don't want them. If you are going to charge more that put a great reason behind it. Serve healthy or organic food, offer a certain preschool curriculum or special hours.
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Childminder 09:58 AM 07-16-2014
I offer Monday-Saturday 6 am til midnight, high scope and Gee Whiz curriculum, State subsidy and all supplies. The only people that answer my ads ask what I charge and go to the SAHM that offers 1/2 my rate. They don't ask or care about what I offer. Hasn't always been like this and hopefully your area is in better condition than mine is right now
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midaycare 10:42 AM 07-16-2014
Originally Posted by Childminder:
I offer Monday-Saturday 6 am til midnight, high scope and Gee Whiz curriculum, State subsidy and all supplies. The only people that answer my ads ask what I charge and go to the SAHM that offers 1/2 my rate. They don't ask or care about what I offer. Hasn't always been like this and hopefully your area is in better condition than mine is right now
I'm in MI too, but the other side of the state. There is a wide range of incomes, here, too. I also have to deal with a lot of part-timers. The majority of my clients are part time. People do what they can to have grandparents watch their kids a few days a week, or work a 3-4 day workweek.

I priced out what I thought was reasonable - $25 per day - but I was told I was low. So I didn't have too much trouble filling up, although I just had 2 siblings leave, and 1 I had to term. Luckily I'm filling up again after a few very boring weeks.

I think the low price helped me to fill up, and now I'm getting referrals from the parents here because they tell everyone what a great program I have. Since word of mouth is spreading, I am raising rates in September, but not for current clients.

Good luck; I know it's frustrating!
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rebekki78 12:18 PM 07-16-2014
Originally Posted by bklsmum:
When I first started I had very low rates to be able to fill the spots and get going. After I was full and fine tuning the group I advertised at a little higher rate for new kids. Once I had a good group and a small wait list I raised the rates for the parents who had started under the lower rates. It was about a six month process but it let me fill up and worked out well for my parents too. There was very little fuss.
This is pretty much what I did. It seemed to work well both getting children enrolled and getting the word out.
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rebekki78 12:23 PM 07-16-2014
Originally Posted by midaycare:
I'm in MI too, but the other side of the state. There is a wide range of incomes, here, too. I also have to deal with a lot of part-timers. The majority of my clients are part time. People do what they can to have grandparents watch their kids a few days a week, or work a 3-4 day workweek.

I priced out what I thought was reasonable - $25 per day - but I was told I was low. So I didn't have too much trouble filling up, although I just had 2 siblings leave, and 1 I had to term. Luckily I'm filling up again after a few very boring weeks.

I think the low price helped me to fill up, and now I'm getting referrals from the parents here because they tell everyone what a great program I have. Since word of mouth is spreading, I am raising rates in September, but not for current clients.

Good luck; I know it's frustrating!
I am in West Michigan and find this to be true. I charge less then what I was paying as a working mom but more then some of the others. I found the medium and slowly raised it as I got going, but not my a huge margin. I live in a town without any centers and there are only a few within a 15/20 mile radius. We have around 20 family/group homes and many SAHM's who don't charge much. I have found that most people want a licensed provider and aren't going to the SAHM's in my area. The State has also recently been posting on Craigslist that SAHM childcare is illegal in this state if not licensed, so I hope that helps slow it down a bit. Most of them don't care though.
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earlystart 04:04 PM 07-16-2014
When I first opened I advertised what rates I wanted to charge, but said there was a special if you signed up at the full-time schedule by X date, then you'd get a $15/week discount. I've heard in business it's always good to show what you're "normal" rate is, then apply the discount on top of that, so the customer can see what a value they're getting, and in the future if you raise rates you say the promotion has ended. I got enough families enrolled to get going, and then a couple months later raised my rates for filling up the rest of the spots. Then the next year I raised the rate for the families who had the discounted rate to my current rate.
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Childminder 06:57 PM 07-16-2014
Originally Posted by :
I'm in MI too, but the other side of the state. There is a wide range of incomes, here, too. I also have to deal with a lot of part-timers. The majority of my clients are part time. People do what they can to have grandparents watch their kids a few days a week, or work a 3-4 day workweek.

I priced out what I thought was reasonable - $25 per day - but I was told I was low. So I didn't have too much trouble filling up, although I just had 2 siblings leave, and 1 I had to term. Luckily I'm filling up again after a few very boring weeks.
Today I got two week notice for siblings. Grandma quit her job and is moving in.
Yay me! Going to have to figure out something soon.
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MsLisa 08:02 AM 07-17-2014
My area is so saturated with other SAHMs doing the same thing that it's near impossible to stand out. From ex-nurses and teachers to mothers of like 5. It seems to be the go-to for making extra income in my area & they have no problem undercutting whatever ad you post. Mind you, there are only about 3-4 actual centers around here. Most kids are watched by (unwilling) grandparents. So I'm often left scratching my head.
{Sorry I have no advise, but I feel you!!}
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My3cents 11:15 AM 07-17-2014
Originally Posted by MsLisa:
My area is so saturated with other SAHMs doing the same thing that it's near impossible to stand out. From ex-nurses and teachers to mothers of like 5. It seems to be the go-to for making extra income in my area & they have no problem undercutting whatever ad you post. Mind you, there are only about 3-4 actual centers around here. Most kids are watched by (unwilling) grandparents. So I'm often left scratching my head.
{Sorry I have no advise, but I feel you!!}
don't give your rates out over the phone, tell them that you go over that at interviews. This cuts out the peeps that are just looking for a good deal on daycare and helps you to find parents that are looking for quality care and want the child to grow with you-

Sometimes I get caught off guard, but usually I will say I don't discuss rates over the phone we can talk about that more when I meet with you and find out what your needs are etc... if they keep poking I say when would you like to meet up with me, I could do a 5:30 on tuesday. I try to direct the conversation- this really weeds out clients that will not respect me and are daycare hopping for best deals. I look for steady reliable income and respect. It has taken me a long time to get to this but the more I do it the better I get at it. Hope this helps you-

set your rates at a fair price that makes it worth while to you- don't undercut yourself. I also agree find a niche and sell your program. This is what I offer..........this is what I am about...... and save some of that for the interview or double time it with more ooomph. Good luck in your new adventure. You found the right place to find a wealth of knowledge, helps, and inspiration here on the boards in the forum-
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Tags:advertising ideas, charge per day, finding clients, hourly wage, lower rate, marketing ideas, rates
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