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Jo123ABC 12:33 PM 10-14-2020
How do you guys do raises? Do you get an annual percentage raise or do you just raise it however you feel every year or do you never do a rate raise? I've been in the business for 4 years and I've only raised it one time. I want to be competitive with other daycares in my area. I'm thinking about implementing a 2% annual raise like "normal people" usually get but that seems high even though it's not really.
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Blackcat31 12:51 PM 10-14-2020
Originally Posted by Jo123ABC:
How do you guys do raises? Do you get an annual percentage raise or do you just raise it however you feel every year or do you never do a rate raise? I've been in the business for 4 years and I've only raised it one time. I want to be competitive with other daycares in my area. I'm thinking about implementing a 2% annual raise like "normal people" usually get but that seems high even though it's not really.
I raise my rates by $5-$10 per week every year but only new kids coming in get the new rate. All other kids stay at their same rate the entire time they are enrolled. If they have a sibling start the sibling starts at whatever the rate is at that time.

That's my compromise for charging 52 weeks a year regardless of absences or closures.
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Cat Herder 05:18 PM 10-14-2020
I do similar to BC. I go up $5-$10 per year depending on how much my expenses go up each year (mostly the power bill).

The difference is I only guarantee rates for two years of enrollment, then the rate goes up, maximum $10 per week/2 years.

My reasoning: If they just happened to be unlucky enough to be enrolled during two consecutive $10 rate increase years (rare), I should meet them half way. I feel a $20/week rate hike is a bit too much for a loyal family.
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Gemma 04:34 AM 10-15-2020
I only raise tuition to new clients.
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Ariana 06:47 AM 10-16-2020
I only raise to new clients as well but to be honest my rates are very similar to what they were when I first opened. With new providers popping up with super low rates and a provider on every corner itís hard to set your rates too high. I am already about $10 higher than most per day.
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AmyKidsCo 12:59 PM 10-16-2020
Interesting! My policies state that an automatic increase will go into effect each fall. I usually look up the cost of living increase, then figure out what the rate will be if I increase by that much, then fiddle with it until I'm happy.

I have 3 rate schedules - 0-2, 2-5 and 5+, so it never occurred to me to keep rates the same for a family their whole time here. Now you've got me thinking...
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Blackcat31 02:02 PM 10-16-2020
Originally Posted by AmyKidsCo:
Interesting! My policies state that an automatic increase will go into effect each fall. I usually look up the cost of living increase, then figure out what the rate will be if I increase by that much, then fiddle with it until I'm happy.

I have 3 rate schedules - 0-2, 2-5 and 5+, so it never occurred to me to keep rates the same for a family their whole time here. Now you've got me thinking...
Unless I did the math wrong, (which might be a very real possibility since I hate math ) I make more money by not raising rates.

I tell my families that the rate they start with is the rate they leave with. No rate increase the whole time they are here. Average 5 years since I take 0-5 yrs only. The compromise to not increasing their rate is it's due 52 weeks a year regardless of absences or closures.

I close less than 15 days a year and don't give families the "standard" two weeks vacation time.

5 years at the same rate is approximately $5000 MORE of income (per family) in comparison to a $10 per year rate increase (including the 2 weeks vacation/time off) method.

So it sounds good to parents to pay the same rate for 5 years but it actually benefits me more than it does them.
It is easier for both sides to budget a flat rate too so that's a plus!
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Meeko 09:47 AM 10-18-2020
I do the similar to Blackcat.

When parents enroll, I promise same price for life as long as their account is in good standing and policies are followed. If they leave and want to come back with new sibling or whatever, it's at the new price.

I raise prices any time I want for new incoming families.
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grandmom 02:55 PM 10-19-2020
Each new family pays a slightly higher monthly tuition. Plus, each spring I evaluate and may (or not) raise rates on everyone. The contract says this and my letter I hand out says something about 'annual tuition change'.
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