I just found out that I am WAY over priced for my area. I mean, by like $40 a week. Biggest problem is, if I drop my prices I won't even be able to pay my bills, let alone cost of living. My overhead is just way too high. Now I'm totally devastated. What am I going to do?!

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Is there a way to set yourself apart from the rest? An extra service for that $40. By extra service I don't mean taking in their wash. I'm thinking of more flexibility with hours, provider holidays, vacation, etc...

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What would you suggest?

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Reevaluate your overhead & look for cost saving measures. You can also have some of you food expenses reimbursed if you follow/sign up for the Child & Adult Food Care Program. Here's the link: http://www.fns.usda.gov/cnd/care/Homes.htm

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Do you have clients in care? If so, they are willing to pay your rate for the service. Are they threatening to leave?

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Are you full?

Does it really matter that you charge more than average?

I used to charge the same as everyone else. Then over the years I kept increasing, and now I'm quite a bit more than the average for my area. I am always full to capacity and have a very large waiting list.

If you are having trouble filling up, then I would consider lowring your prices... because $40 less a week is better than nothing. Can you take another kid (even PT) to make up the difference?
If not, I would start reworking my budget and cutting out anything that wasn't a necessity (it's suprising how much money people don't even realize they spend each month).

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Unless you are having trouble gettng clients and have openings then I wouldn't worry about it.

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I'm not even close to full. I have a waiting list for infants but have only had one call for kids over 2. The head of the child care association said that its really hard to get kids over 2 in this area, and your best bet it to wait until they outgrow the infant spot or are referred by current clients. I currently only have 2 PT infants and then my daughter who will be 2 in Dec and will open up another spot. Right now I'm not even able to pay my bills. I've spent a year and a ton of money opening this day care and now I don't even know if I'll be able to swing it. I'm so distraught.

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It's not just your area - most daycares in my area have endless inquiries for infants (and limited spaces) and not many inquiries for toddlers. Because people are still willing to pay your fee (those on the waiting list) I don't necessarily think that lowering your prices will help you get kiddos who are older - but if you have no other options you can try it out and see (keep current clients at the current prices though) and see if it helps. It might just be that there is a little demand for childcare in your area for the age group you need.

What methods of advertising are you using?

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overhead do you mean what you spend on the childcare or your household bills.

Did you have a job with a big salary before you decided to do childcare. And did you buy an expensive house because you could afford it then?

Starting out if you can make what you were making before MINUS what you paid in childcare and transportation you will break even where you were before.

Are you buying lots of toys and do you really need them

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Are you advertising? You can advertise on craigslist, donate some books with your daycare info on them to doctors/dentist offices, put your info on bulletin boards. Offer a one time discount to your current families if they refer a family who starts care, mention on your facebook that you have openings, make a facebook daycare page and post lots of photos.

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I hate to say this, but maybe you should lower your rate just to get kids in the door.

$40 less a week per spot is still more then an empty spot.

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I see a few mistakes you made.

1. never spend a ton of money to get started. It is not needed. But you did it so you have to move on.

2. never take infants p/t they are the one opening there is tons of demand for AND they are limited openings.

So you only take f/t infants and they pay a higher rate than your 2 yr olds and up ( or toilet trained and up)

P/t children also pay a higher rate per day and they pay even if they do not come.

When you do take a p/t make them have set days and a minumum 3 days. The only way you do 2 day a week is when they fill in a different 3 day a week p/t child.. AND if the 3 days child leaves they have to pick up a third day or lose their spot to a new child when you get a call.

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My overhead is the household bills and insurance costs. I'm renting, and rented this location specifically with the child care in mind. Perfect location and bright open space.

I advertise on craigslist, FB, the local paper, Care.com, and through LOCATE. I also have a sign in my window and signs on my car.

I was working in a restaurant before and made decent money (more than I'm making now with my current income) but I was totally burnt out. The whole thing was to be able to be with my daughter more and still afford my bills.

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I just posted a similar thread this past week and I am pretty much in the same boat. When I used to be full all the time, now I have 2 openings for 2 and up and when I shopped my competitors last week I realized that there are suddenly a TON of large and small daycares in my area and several large professional centers - everyone seems to be competing for the same pool of kids so prices have apparently gone down by $30 a week. (I too easily fill my infant spots) I am only licensed for 8, and can't make it at those prices either because I support a family of six on my daycare income. It is a quandry! So here's what I've come up with so far -

a) Specialize in something or offer something that no one else (or few) do ... i.e. - bilingual curriculum, extended or off hours, extra services, etc.

b) Expand your license (if you are able) to accommodate more kids. You may not be fully enrolled right now, but this business is cyclical. There are certain times of the year when I am literally turning people away and putting them on my waiting list and others when I can't get one call. At some point, you can take more kids at a lower rate and still make what you need.

c) Pick a price point that is not the lowest, nor the highest for your area and make do your best to make it worth what parents will pay for your specific services.

d) Make cuts in your expenses where possible.

e) Look for new places and ways to reach a different group of potential clients.

I really understand what you are going through and I have empathy for you and your situation. If I come up with anything else, I will post!

Hang in there and remember that everything is temporary - including dry spells!

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I'm not sure what your overhead you are working with. Are you supplying wipes & diapers? If this in your home or do you have a second location? I tend to cook from scratch, it's more time consuming, but cheaper overall. I also take donations of toys/art supplies from a local FB page. I'm sure if you Google it, you will find ideas.

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How about advertising/leaving business cards/brochures with your local schools. This could bring in SAers (if interested) or siblings of SAers. You could adevrtise in preschools to get PT toddlers. Adeveritse at your local gym, restaraunts, libraries, dentist/doctor offices, corner stores, grocery stores, etc. Always have LOTS of business cards on you - everywhere I go someone inevitably asks me "Do you run a daycare?" I always say "Yes, here's my card, pass it along if you know someone who needs quality care!"

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I would offer more hours, I open at 5:30 some parents don't really have a choice in chosing who they go to if you are the only one open that early in the morning. I am also open on veterans day and have got several calls for it.

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Sounds like it might just be time to re-evaluate what your monthly bills are and try to do whatever you can to eliminate unnecessary spending.

I also was wondering what the high overhead costs are that you mentioned. I guess I don't spend hardly anything on running my child care so I am always curious as to what providers mean when they say high overhead costs.

Infants spots in my area are also in high demand. We are allowed to have 3 max (depending on some variables) but those three spaces ONLY have one full time rate which is much higher than what the full time rate would be for a 2+ yr old.

I don't charge anything but that one rate for infants whether they are full or part time.

That way I am making the most I can for those coveted spots and since there are far more infants than there are spaces available, no one ever complains. Most providers around here do the same.

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Parents supply diapers, wipes and meals. I am not part of the food program and my daughter has food allergies (Cows milk protein and Soy) and its just too difficult to find a good variety that will please everyone.

I do have flyers that I put up but it seems like every time I put one up, someone takes it down. I always attach my business cards to the bottom so it doesn't need to be removed unless the card are gone and they always disappear the day or so after I put them up.

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I guess I used the wrong term "overhead". I'm talking about ALL my bills and everything. Monthly cost.

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are you a single parent??? if so your rent is your overhead.

If you are married then then all the family bills are not your overhead. many people just starting out need to take a weekend or evening job to make ends meet. Or the man in the house takes a second job.

Maybe you could offer weekend or evening care. in some areas it is a need that needs to be filled.


If you are single that makes it hard at times. When times are lean I am glad we have dh income also. When times are good I make sure I bank the extra or pay off bills. I do not figure the extra in our budget.

If you are licensed I would sign up on the food program It really can help. They eat what you serve. except you need to serve them milk if over 12 months.

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I just wanted to add here how it works for me to give a better understanding of what some provders may consider their "overhead". All of the expenses below are worked into my fee structure in one way or another, and I am the queen of budgeting so I know exactly how many kids I need and how much I need to be charging per month each year to cover both our personal expenses and the expenses if living/operating the daycare. I coupon a fair bit, buy in bulk, request donations, shop at thrift stores, recycle, reuse, etc... but everything does add up!


Rent/mortgage - my husband and I would live in a much smaller (less expensive) home if we didn't need the space to operate a childcare.

Utilities - we would use much less (and thusly pay much less for) electricity, water, heat, etc if we didn't operate a daycare in the home. Also many of the smaller homes in our area (that wouldn't have enough space for daycare) the utilities are included in rent/mortgage. When hubby and I are not home/sleeping we turn the heat off (yes, even in the crazy -30 to -50 cold), unplugged anything not used, turn off all lights, never leave water running, hang clothes to dry in the summer, etc. We do our best to conserve resources and money.

Maintanance/repairs - our home and everything in it gets much more wear and tear with the daycare than it otherwise would.

Insurance - we pay additional insurace to cover the liabilities of operating a home daycare.

Groceries - I cook almost everything from scratch, healthy HEARTY meals, barely any food goes to waste in our home, but of course our bill is still much higher than it would be if we didn't have daycare kids to feed.

Office Supplies - I spend much more in office supplies than I would if we didn't operate a home business; also our larger electronics get more wear and tear as they are used regularily for daycare purposes and thusly need to be replaced more often (camera, printer, laptop, etc).

Kitchen supplies - buying/replacing sippies, cups, plates, utensils, high chairs, boosters, etc

Nap supplies - buying/replacing nap mats, PPs, bedding, pillows, etc

Cleaning supplies/trash bags - cleaning toys and surfaces, cleaning accidents, etc uses more cleaning supplies than an average home not running a childcare.

Taxes - each year I end up owing about $3000 in taxes, which I divide into 12 payments which comes out of my monthly income
- it also costs about $250 for us to get our taxes done by our bookeeper each year (both hubby and I are awful with math)

Bank Fees

Transportation - we don't drive/own a car (which saves us about $10,000 a year), but we do use public transportation to go on field trips - it's free for the kids but it's $5/adult per field trip (so $10 if hubby comes with, which adds up over the year)

Parties and decorations - I make alot of home-made decorations and reuse year after year when possible, but there is still a cost
- we often bake cookies and decorate them during holiday themed parties which comes with a cost
- I bake/decorate cupcakes for the kids having birthdays, even from scratch, this has a cost
- Gifts/goodie bags have a cost

Hygeine - the daycare kids use soap when washing hands and use toilet paper when toileting, which costs
- we all know how many tissues we go through during cold season!
- laundering bibs/sleep linens/wash cloths when needed costs


Furniture - buying/replacing furniture used for daycare

Toys/Books - buying replacing toys/books

Craft supplies - this really adds up for me, despite the fact that I buy everything from the dollar store

Sick Days/Maternity Leave - I give myself 5 paid sick/emergency days per year, however, if I go over that, I lose income so I need to save for those occasions. My mat leave will be two weeks unpaid, where I will lose half my monthly income. I do consider these daycare expenses - because if I was working out of the home I would be entitled to a full 12 month paid maternity leave and more paid sick time.

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That's not true. Where I live, I am married and a large portion of our rent and and half of our monthly bills are considered overhead and we can write them off at tax time. We would live in a smaller/less expensive home and use less utilities if we weren't operating a home business/daycare and they take that into account.

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Crafts, copying (from home), paper, are one of my biggest expenses for childcare.

I have found bargins at the Dollar Tree but then others aren't such a deal. I'm going to really start making lists and see what I can get from the Dollar Tree, Michaels, and Wal-Mart for a good price.

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I added comments in red above. I have a separate home so my overhead should technically be more than most providers I would think.

I am not saying people are doing anything wrong, I am just wondering what it is that OP has that is costing so much.

I get told each year by my accountant that I should spend more on my business but I just can't justify spending more when I can do it efficiently now as it is.

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I would extend your hours if possible. Let people know that you won't raise their rates since you are on the high side anyway. Don't take any paid holidays. Give families a week or two where they don't have to pay if they are on vacation, sick days, appt days, etc...

K

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Thanks for sharing Blackcat... and yes, I agree, it should technically be much more expensive for you to own two homes (with two sets of bills) than any of us!

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I am a single parent, so it really adds to the stress. And my ex is NOT consistent with his Child Support. I would say I've gotten a check maybe 3 times. I'm going to lower my prices and meet in the middle. Probably going to look for a part time job in the evenings. At this rate my daughter isn't going to have a birthday or Christmas. So I need to do something like, now. Thanks for every ones input. Its nice to know I can get some kind of support on this site

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being a single parent does make a difference.

and my comment stating all the bills are not her overhead if married was not that they are not part of what you deduct at tax time just that if married the mans income pays for a big chunk of that also.


have you applied for any and all assistance you may qualify for ? If your income is low that is an even bigger reason to sign up on the food program. They will reimburse for your childrens food when other children are in care. Also if you have low income you are on the higher paying teir 1

the good thing is little ones just like to open things they do not need expensive gifts. I remeber the year we found a trike at goodwill I stuck a bow on it and it was his favorite gift.

Getting a job in the evening will be hard if you need to pay for childcare so instead offer evening care. How about people you worked with do they need off hours care?

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My husband and I file our taxes seperately, so his income isn't taken into consideration at all when I do my tax deductions at the end of the year. I give the grand total *I* made for the entire year and a portion of the rent and all utilities is tax deductable (the square footage dedicated to daycare, and the estimated additional monies I pay into utilities that I wouldn't be paying if I was out of the home working for 8-10 hours each day). Again, my husband's income isn't factored into this process at all. I have had many different bookeepers and accountants over the years and it's always been done this way.

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