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Daycare Center and Family Home Forum>Raising Rates?
DaycareMom 06:38 AM 01-16-2014
I was wondering how often - if at all - do you raise rates?
About 6 months ago, I increased my rate for one family by $10/week, but only because I was going to start providing meals so I don't really count that as a rate raise since it was for something specific and in all honesty does not cover my cost anyway ...

I have been open for almost 5 years and have not increased my rate ever. I was thinking of increasing the rate maybe in June.

What is a fair rate increase? Do any of you have a letter that can word it? Any help is appreciated. Thank you in advance!
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taylorw1210 06:41 AM 01-16-2014
Looking forward to the responses. I have not increased my rates since opening but I believe I will do so next January.
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Msdunny 06:45 AM 01-16-2014
I re-evaluate every Summer - a couple of my families are teacher's kids and come back in September. I ask myself, "Is it worth it to me to keep doing this for what I make?" If not, I have to decide what I need to make to meet our needs. I then raise rates to reflect that need. This past fall, I went up $5 per day, and no one even blinked an eye!

I can't do this job if it isn't worth it for me. If I am worried about finances or how we are going to pay bills, I need to either move on or raise rates.

So, long story short , I take a look at my rates every year and make adjustments if needed.
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LaLa1923 06:47 AM 01-16-2014
I wish I could raise my rates. Here, mostly everyone charges the same...
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Blackcat31 06:48 AM 01-16-2014
Originally Posted by DaycareMom:
I was wondering how often - if at all - do you raise rates?
About 6 months ago, I increased my rate for one family by $10/week, but only because I was going to start providing meals so I don't really count that as a rate raise since it was for something specific and in all honesty does not cover my cost anyway ...

I have been open for almost 5 years and have not increased my rate ever. I was thinking of increasing the rate maybe in June.

What is a fair rate increase? Do any of you have a letter that can word it? Any help is appreciated. Thank you in advance!
I raise my rates anywhere from yearly to every 3 years. Depends on.....well all sorts of things. The market, the reimbursement rate for subsidy care, the raise in cost of living expenses or licensing.

My last rate increase letter says something like

"Dear DCP's

With the rising costs of running a business, it has become necessary to raise the rates in which I charge clients for the services I offer.

Unlike consumable goods you purchase in a store, parents have the ability to keep their child care costs down by scheduling only hours and/or days that are necessary for you to work or attend school. The amount of increase will be dependent on each family's needs.

The new rate scale is attached. If you have any questions, please let me know.

Sincerely,

Provider"


I charge on a graduated scale. The more time a parent uses for care, the more their rate is. If they want to keep their rate lower, they find ways to pick up earlier or keep their child home when they are not at work. That way it leaves parents in charge of increases.
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Crazy8 06:48 AM 01-16-2014
I often go years without increasing rates and only usually raised them for new incoming clients. This past summer I raised them for everyone and ended up losing 2 clients (one was just moving, other was due partially to rates and some other issues). I actually just revised my rate sheet for Jan. and went back to my lower rates. Business has been tough lately.

In almost 13 years my full time rate has gone up $35/week but I made a big jump from $150 to $175/week about 3-5 years after I started because I realized my rates were pretty low. I tried going to $195/wk and now going back to $185/wk.
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LaLa1923 06:51 AM 01-16-2014
Originally Posted by Blackcat31:
I raise my rates anywhere from yearly to every 3 years. Depends on.....well all sorts of things. The market, the reimbursement rate for subsidy care, the raise in cost of living expenses or licensing.

My last rate increase letter says something like

"Dear DCP's

With the rising costs of running a business, it has become necessary to raise the rates in which I charge clients for the services I offer.

Unlike consumable goods you purchase in a store, parents have the ability to keep their child care costs down by scheduling only hours and/or days that are necessary for you to work or attend school. The amount of increase will be dependent on each family's needs.

The new rate scale is attached. If you have any questions, please let me know.

Sincerely,

Provider"


I charge on a graduated scale. The more time a parent uses for care, the more their rate is. If they want to keep their rate lower, they find ways to pick up earlier or keep their child home when they are not at work. That way it leaves parents in charge of increases.
Could you share your rate scale??
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taylorw1210 07:08 AM 01-16-2014
I would be interested in seeing your rate scale, too.
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Blackcat31 07:16 AM 01-16-2014
Originally Posted by LaLa1923:
Could you share your rate scale??
It is based off Nan's

My base rate is set for pick ups at 3:00.

Rates increase with each additional half hour of care.

The increase is around $2.50 per half hour.

For example if you schedule 3:00 pick up, your rate is $150

If you schedule a pickup at 3:30, your rate is $162.50

4:00 pick ups are $175.00

I don't do half days and don't allow for small differences in pick up times. Parents choose the LATEST pick up time they need and their rate is figured accordingly.

MANY MANY times a month, I am done working at 4:00 and sometimes even 3:00 and still make the same amount of money (sometimes MORE) that I made when I was simply open from 6-6 and charged a flat weekly fee.
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originalkat 07:37 AM 01-16-2014
I have not changed my rates in 6 years. It just works for my budget and is still competitive with my area.
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DaycareMom 11:24 AM 01-16-2014
What would be a fair increase?
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melilley 11:36 AM 01-16-2014
I have only been open for a year an have not increased my rate yet. But, I am charging $10 more a week for new families. I'm on the fence as whether or not I'm going to raise them for existing families though.
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Jack Sprat 11:42 AM 01-16-2014
Originally Posted by melilley:
I have only been open for a year an have not increased my rate yet. But, I am charging $10 more a week for new families. I'm on the fence as whether or not I'm going to raise them for existing families though.
This is me. I'm not raising rates this year but, going to 50 weeks paid. Instead of no paid holidays. Also, giving parents 5 days vacation that they do not have to pay for. And of course my 5 they do not pay for. I would like to raise my rates but, I also need to stay (I feel) close to the same rate as other providers in the area. They both however, have assistants thus can have more kids.
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melilley 11:49 AM 01-16-2014
Originally Posted by Jack Sprat:
I also need to stay (I feel) close to the same rate as other providers in the area. They both however, have assistants thus can have more kids.
This is why I raised it for new families. I always go to CL to see if providers post their rates and some do so I found out that right now I'm on the lower end (for licensed providers) I've see anywhere between $100 (only 1 does that rate) a week to $150. I was at $130 and I have 3 stars (the stars have to count for something, right?) so I figured I should charge towards the higher end! Of course illegal providers charge way less, but I feel parents will see past that and if not, oh well!
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TwinKristi 01:21 PM 01-16-2014
Since I'm so slow now I wouldn't dream of upping my rate, even for new clients. I'm on the average for my town. If you go up to the bigger city in our county it's less, by $10+/day. But in my town just about everyone charges $45-60/day so I do too. But if I did it would be new clients or additional siblings or something.
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DaycareMom 03:01 PM 01-16-2014
How much notice should I give?
Would you just hand them a letter and let them read it at home or discuss it at pick-up?
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amtnk 03:07 PM 01-16-2014
My rates have been the same, but I've only been opened a year. They are comparable to others in the area, but I do charge extra for breakfasts (and sending your kids with breakfast), if you are late without a telephone call, and more for infants under 18 months. The (only) commercial daycare around here charges $5 extra per day for infants ($45/per day), and a few other in-home charge $30-$35.

I feel that I want to charge more for some families (i.e. the child that NEVER stops crying), although she is considered full time and is only here 3.5 days per week, so I try to reason that out in my head
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melilley 03:15 PM 01-16-2014
Originally Posted by DaycareMom:
How much notice should I give?
Would you just hand them a letter and let them read it at home or discuss it at pick-up?
I have it in my policies that I can change a policy with a two week notice so that's what I would give. I would write a letter and tell them in person and then give them a new contract with the new rate on it.
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Unregistered 05:19 PM 01-16-2014
You could mail it? I would give them at least 2wks notice.
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LaLa1923 06:19 PM 01-16-2014
Originally Posted by Blackcat31:
It is based off Nan's

My base rate is set for pick ups at 3:00.

Rates increase with each additional half hour of care.

The increase is around $2.50 per half hour.

For example if you schedule 3:00 pick up, your rate is $150

If you schedule a pickup at 3:30, your rate is $162.50

4:00 pick ups are $175.00

I don't do half days and don't allow for small differences in pick up times. Parents choose the LATEST pick up time they need and their rate is figured accordingly.

MANY MANY times a month, I am done working at 4:00 and sometimes even 3:00 and still make the same amount of money (sometimes MORE) that I made when I was simply open from 6-6 and charged a flat weekly fee.
How??

$2.50 for ever 30 minutes? Wouldn't that be $152.50?
I'm tired..but what am I missing??

Oh wait!! I'm sorry! You mean $12.50 right??
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TwinKristi 06:27 PM 01-16-2014
[quote=LaLa1923;425888]
Originally Posted by Blackcat31:
It is based off Nan's

My base rate is set for pick ups at 3:00.

Rates increase with each additional half hour of care.

The increase is around $2.50 per half hour.

For example if you schedule 3:00 pick up, your rate is $150

If you schedule a pickup at 3:30, your rate is $162.50

4:00 pick ups are $175.00

I don't do half days and don't allow for small differences in pick up times. Parents choose the LATEST pick up time they need and their rate is figured accordingly.

MANY MANY times a month, I am done working at 4:00 and sometimes even 3:00 and still make the same amount of money (sometimes MORE) that I made when I was simply open from 6-6 and charged a flat weekly fee.[/QUOTE]

How??

$2.50 for ever 30 minutes? Wouldn't that be $152.50?
I'm tired..but what am I missing??

Oh wait!! I'm sorry! You mean $12.50 right??
It's $2.50 per 30 min per DAY, 5 days is $12.50 and those are her weekly rates.
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Blackcat31 07:49 AM 01-17-2014
Originally Posted by LaLa1923:
How??

$2.50 for ever 30 minutes? Wouldn't that be $152.50?
I'm tired..but what am I missing??

Oh wait!! I'm sorry! You mean $12.50 right??
Yes, the fees for the 30 minutes are PER DAY.

Hope that clears it up... If not, let me know, I'd be happy to explain more.
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nanglgrl 12:39 PM 01-17-2014
Originally Posted by Blackcat31:
It is based off Nan's

My base rate is set for pick ups at 3:00.

Rates increase with each additional half hour of care.

The increase is around $2.50 per half hour.

For example if you schedule 3:00 pick up, your rate is $150

If you schedule a pickup at 3:30, your rate is $162.50

4:00 pick ups are $175.00

I don't do half days and don't allow for small differences in pick up times. Parents choose the LATEST pick up time they need and their rate is figured accordingly.

MANY MANY times a month, I am done working at 4:00 and sometimes even 3:00 and still make the same amount of money (sometimes MORE) that I made when I was simply open from 6-6 and charged a flat weekly fee.
I agree. When I went to this rate scale I was really surprised that all of my clients could figure out a pick up by 3:30. Sometimes they involve family or friends but usually one parent gets off earlier than the other one and can pick up. I started with this scale but like you said I'm making the same amount (if not more) for less hours so now I just say that my hours are 7:30-3:30 and if someone calls needing more time than that I consider it on an individual basis. So far I haven't found a single family that makes me want to stay open later. lol.
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Jack Sprat 12:50 PM 01-17-2014
I told DH that if I could raise my rates by $60 a week per family then I would just take 3 full time kids and one part time. He said to mention it the families and emphasize that with limited numbers, I would be able to give more one on one to each child, and since each family is planning on having a 2nd child they would be sure to have a spot (which they are anyway). I don't see the parents going for this. But, it was a good thought. I think
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DaycareMom 02:15 PM 01-18-2014
I will be raising my rates by $10-15/ week / family. Does this seem fair?
Does anyone have a sample letter? TYIA!
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Maria2013 02:34 PM 01-18-2014
I've been open 8 years and only raised rates once last fall, but to new enrollments only
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LaLa1923 03:41 PM 01-18-2014
Originally Posted by Blackcat31:
Yes, the fees for the 30 minutes are PER DAY.

Hope that clears it up... If not, let me know, I'd be happy to explain more.
oh geez... ok thank you!! lol


So you allow them to have a different rate daily or weekly?? Or they pick a rate??
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Blackcat31 08:30 AM 01-19-2014
Originally Posted by LaLa1923:
oh geez... ok thank you!! lol


So you allow them to have a different rate daily or weekly?? Or they pick a rate??
I bill weekly only.

Families choose the latest pick up time they need (even if its only one day a week) and their rate is figured accordingly.

I base ALL rates on my base rate of 3:00 pick-up and add additional fees for time needed after 3:00 and how many days per week they need. I offer 3, 4 or 5 day options only.

3 day base rate is either $110/$125
4 days is $125
5 days is $150
**********************************

3 days a week is a flat $110.
If they need time beyond 3:00, I add $2.50 for every half hour needed.
If the 3 days are the same 3 days each week.. Cool!
If they need various 3 days each week, I add $15 to their weekly fee.

So it would look like this for these families:

Family #1 needs 3 days each week (same 3 days) pickup at 3:00 two days and pick up at 4:00 one day.
$110
$10.00. ($2.50 for each half hour past 3:00)
Total weekly rate is $120 per week

*******************************
Family #2 needs 4 days per week with a 4:00 pick up everyday

Base rate for 4 days is $125
Pick up after 3:00 four days a week is $20
Total weekly rate is $145

********************************

Family #3 needs 5 days a week with 3:00 pick up
Rate is $150 per week with no additional charges

********************************

Family #4 needs 5 days a week with pick up at 3:00 on T/R and 4:00 pick up M, W, F

Their base rate is $150
Add the pick up after 3:00 three times per week ($15)
Total rate is $165
*****************************

This way, I know exactly when I am done working each day/week and make MORE $ per week( in terms of hours worked) than simply charging a flat weekly rate of $150 and letting everyone come from open to close.

Families will find ways to save a buck and pick up early. I haven't run into any kinks yet but Im sure someone somewhere has a wonky schedule that wont fit into my formula but so far it works well for me.

Hope that makes sense.
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Second Home 05:41 AM 01-28-2014
This is the first time I have raised my rates ( for all new starting families in 2014) in the 10 + years I have been open .
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therov 07:01 AM 01-28-2014
- I reevaluate every year, but raised after the third year I was open. I raised it for new families only. I still grandfather one family at the lower rate because they have been repeat customers x 3 kids (not continuously over 4 years). I raised by 5%.

- Don't forget that you can deduct the cost of meals and snacks from your taxes at the federal reimbursement rate. So while $10/wk won't cover the meals and snacks entirely, you'll be rebated at tax season (something like $2.62 per meal, $0.65 per snack)

- I would give existing families one month's notice, which coincides with my agreement that requires 30 days' notice for termination.


Originally Posted by DaycareMom:
I was wondering how often - if at all - do you raise rates?
About 6 months ago, I increased my rate for one family by $10/week, but only because I was going to start providing meals so I don't really count that as a rate raise since it was for something specific and in all honesty does not cover my cost anyway ...

I have been open for almost 5 years and have not increased my rate ever. I was thinking of increasing the rate maybe in June.

What is a fair rate increase? Do any of you have a letter that can word it? Any help is appreciated. Thank you in advance!

Reply
Nebula 10:41 AM 01-28-2014
My rates go up each fall before our school year curriculum starts. They go up $10 a year, and I make this known in my handbook that rates will increase the first of every August.
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