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Daycare Center and Family Home Forum>Raising My Rate For Existing Families - NERVOUS!
Controlled Chaos 07:57 PM 08-10-2014
I currently have everyone on different contracts and billing systems as each family I added over the last 2 1/2 years got a slightly updated and modified contract when they started. I am trying to eliminate some book keeping time as well as raise my rates a little. So I have a new handbook, now everyone will be paying for a slot rather than hourly and will pay whether they use it or not. And now everyone will pay $30 a day. For some this will be a little cheaper per day (I have one hourly that usually works out to $32 but I HATE keeping track and adding it all up). Some already pay this. But 1 family currently pays $25, I took that family when I undervalued my center and was thinking of changing less for potty trained children - forgetting they eat more when they are bigger oops I also have a family that has only been with me 2 months who is being $28 a day, I feel bad raising it so soon after they started.

For those of you that have had families start at one rate and then raise it on them later - how did that go?

I sent home a letter explaining the changes as well as a handout on the new fall curriculum with info on the Pre K workbook and supplies I bought them too - hoping that helps.
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Controlled Chaos 08:01 PM 08-10-2014
Here is the letter I sent home, I am sure it is too long and wordy. I know I shouldn't have to justify my business choices, but I feel like I need to explain my situation to them.

Dear Parents,
I absolutely love spending my days with your children. My days playing with and teaching your little ones are wonderful, but I have been struggling to keep the financial end running smoothly. I am going to need to run my business a little tighter. I canít afford not to. I want to be able to continue to buy quality craft supplies, pre school curriculum resources and healthy food. I currently spend 50 hours a week tending the children, 5 hours a week preparing activities and lessons, and another 5 hours a week on billing, taxes and licensure compliance (Being legally unlicensed requires still following many of their guidelines and protocols). I am hoping I can cut down those last 5 quite a bit by eliminating everyone being on a separate billing system.

Starting September 1st everyone will be on the same rate and payment schedule. Please read through the 2014 handbook and contract as there are changes from when you first joined Little Friends. Please return the signed contract and handbook by August 21st; I will make you a copy to keep. If you do not plan on staying due to a change in the contract or any other reason please let me know by August 21st as well. September 1st we will be starting our fall preschool curriculum, so this gives me time to order supplies and prepare lessons for the returning children.
Thank you.
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sharlan 08:12 PM 08-10-2014
I just raised the rates for 2 of my families. I kept it short and sweet.

Dear DCP,

I will be raising weekly rates by $XX, effective 8/19, 2014. This is my first rate increase in 4 years.

Thank you
S

Neither family complained. Actually, one rolled her eyes, but said, "I know."
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Angelsj 05:07 AM 08-11-2014
They won't read all that anyway.

Dear Parents,

"Beginning XXX date, I will be changing from an hourly rate to a daily (weekly if you want to say that) rate. The charge will now be XXX per week (day)/per child, and will be due whether your child attends or not.

Thanks,
Provider

If anyone seems to balk, just remind them of your two week notice period.
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spinnymarie 07:47 AM 08-11-2014
I agree, keep it short. They don't need to know WHY you are raising rates, just that it is time to do so.

I'd do something like this:

Dear Daycare Families,

Effective Sept. 1st, ABC Daycare will be switching to a daily rate of $30/day per child, and instating a new daycare handbook.

Please review the new rate structure and handbook, and return all signed forms by August 21st.

Thanks,
Provider
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lpperry 07:50 AM 08-11-2014
Do not keep that first paragraph. The parents do not need to know all that. They do not want to know all of that. They are going to be annoyed that you are writing all of that. The other posters had good suggestions of what to write. All the parents need to know is that your rates are changing and the new rate.

I would not change the rate of the person who just enrolled two months ago. I would keep them at $28 a day and then make the change in January or after they have been with you for a year.
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Laurel 08:04 AM 08-11-2014
Originally Posted by Controlled Chaos:
I currently have everyone on different contracts and billing systems as each family I added over the last 2 1/2 years got a slightly updated and modified contract when they started. I am trying to eliminate some book keeping time as well as raise my rates a little. So I have a new handbook, now everyone will be paying for a slot rather than hourly and will pay whether they use it or not. And now everyone will pay $30 a day. For some this will be a little cheaper per day (I have one hourly that usually works out to $32 but I HATE keeping track and adding it all up). Some already pay this. But 1 family currently pays $25, I took that family when I undervalued my center and was thinking of changing less for potty trained children - forgetting they eat more when they are bigger oops I also have a family that has only been with me 2 months who is being $28 a day, I feel bad raising it so soon after they started.

For those of you that have had families start at one rate and then raise it on them later - how did that go?

I sent home a letter explaining the changes as well as a handout on the new fall curriculum with info on the Pre K workbook and supplies I bought them too - hoping that helps.
Dear Parents,

Because of rising costs, effective (date), I will be implementing a new rate scale. Also, you will be paying for the slot not the hours/days attended so you will be charged whether or not your child attends on any given day. This is standard for the industry.

Thank you,
Your Provider

I wrote something similar to this except that I always did charge for the slot. People know costs go up so don't feel guilty about it. I doubt anyone will leave. They didn't with me.
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Laurel 08:07 AM 08-11-2014
Oops, I didn't realize that you had already sent your letter. It's not bad. A little wordy but fine.

How have the parents taken it so far?

Laurel
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Laurel 08:09 AM 08-11-2014
Originally Posted by Controlled Chaos:
I currently have everyone on different contracts and billing systems as each family I added over the last 2 1/2 years got a slightly updated and modified contract when they started. I am trying to eliminate some book keeping time as well as raise my rates a little. So I have a new handbook, now everyone will be paying for a slot rather than hourly and will pay whether they use it or not. And now everyone will pay $30 a day. For some this will be a little cheaper per day (I have one hourly that usually works out to $32 but I HATE keeping track and adding it all up). Some already pay this. But 1 family currently pays $25, I took that family when I undervalued my center and was thinking of changing less for potty trained children - forgetting they eat more when they are bigger oops I also have a family that has only been with me 2 months who is being $28 a day, I feel bad raising it so soon after they started.

For those of you that have had families start at one rate and then raise it on them later - how did that go?

I sent home a letter explaining the changes as well as a handout on the new fall curriculum with info on the Pre K workbook and supplies I bought them too - hoping that helps.
Dear Parents,

Because of rising costs, effective (date), I will be implementing a new rate scale. Also, you will be paying for the slot not the hours/days attended so you will be charged whether or not your child attends on any given day. This is standard for the industry.

Thank you,
Your Provider

I wrote something similar to this except that I always did charge for the slot. People know costs go up so don't feel guilty about it. I doubt anyone will leave. They didn't with me.
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Controlled Chaos 08:42 AM 08-11-2014
haha I know I am soooo wordy. ugh, I hate money/contracts
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Controlled Chaos 08:44 AM 08-11-2014
Originally Posted by Laurel:
Dear Parents,

Because of rising costs, effective (date), I will be implementing a new rate scale. Also, you will be paying for the slot not the hours/days attended so you will be charged whether or not your child attends on any given day. This is standard for the industry.

Thank you,
Your Provider
.
I just copied that. Thanks. I have them printed but am handing them out at pick up tonight. I will re print the cover letter - I think the handbook and contract are good.
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Blackcat31 08:52 AM 08-11-2014
Originally Posted by Controlled Chaos:
haha I know I am soooo wordy. ugh, I hate money/contracts
I tend to be pretty blunt and use wording like Laurel posted so that I don't over explain things.

Since money/contracts are sucky and uncomfortable for most people to talk about, I use as few words as possible to make my point and leave the ball in the parents court and let them be the ones to have to bring it up to me if they need to discuss anything.

Some need clarification and others don't even care...
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Laurel 09:19 AM 08-11-2014
Originally Posted by Controlled Chaos:
I just copied that. Thanks. I have them printed but am handing them out at pick up tonight. I will re print the cover letter - I think the handbook and contract are good.
You're welcome.

Personally I like to give a reason...rising costs and also let them know that charging for the slot is the way most daycare's do it...industry standard. I just like to say these two things in as few words as possible.

Laurel
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Controlled Chaos 10:46 AM 08-11-2014
I took what Laurel wrote and added the part about having not raised my rates ever lol.

Dear Parents,
I have not raised my rates in 2 Ĺ years, but due to the rising costs, effective September 1st, I will be implementing a new rate scale. Also, you will be paying for the slot not the hours/days attended so you will be charged whether or not your child attends on a contracted day. This is standard for the industry. Please return the signed updated contract by August 29th.

Does anyone else I think I should keep the new family at their original rate? I am torn. I think it is a little unfair to raise it so soon after they started but I REALLY want everyone on a standard rate. Maybe I should just suck it up until January and then I can change it then...
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Controlled Chaos 09:13 PM 08-11-2014
I just have to say how much I appreciate all of your virtual support. Handing out the contracts today was a NIGHTMARE! I had a neighbor with a medical emergency. Paramedics called on Grandma who forgot her insulin who was babysitting her 3 grandbabies. I took the 3 little ones so the paramedics and sick gram didn't scare them, until their parents could get there. So as I am handing out these packets with handbooks, new contracts etc. I am 2 over ratio with a one year old who doesn't really know me screaming...it was horrible! I have never gone over ratio before but those babies needed somewhere safe to be. My family I have had for nearly 3 years looked so annoyed about the new contract, but I stuck to my guns because I knew you ladies supported me. I don't think they will leave but they sure are pissed to know they are paying for that week long vacation they just told me they are taking next month. Thanks ladies.
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Blackcat31 08:24 AM 08-12-2014
Originally Posted by Controlled Chaos:
I just have to say how much I appreciate all of your virtual support. Handing out the contracts today was a NIGHTMARE! I had a neighbor with a medical emergency. Paramedics called on Grandma who forgot her insulin who was babysitting her 3 grandbabies. I took the 3 little ones so the paramedics and sick gram didn't scare them, until their parents could get there. So as I am handing out these packets with handbooks, new contracts etc. I am 2 over ratio with a one year old who doesn't really know me screaming...it was horrible! I have never gone over ratio before but those babies needed somewhere safe to be. My family I have had for nearly 3 years looked so annoyed about the new contract, but I stuck to my guns because I knew you ladies supported me. I don't think they will leave but they sure are pissed to know they are paying for that week long vacation they just told me they are taking next month. Thanks ladies.
For whatever reason, parents have a hard time paying for child care.

An even harder time when rates are raised.

Yet, they rarely complain when the cost of a Happy Meal rises every single year.

Just stand your ground and KNOW that you ARE worth every penny you charge.

You obviously put the needs of kids first (which is evident in your situation with the neighbor) and if parents can't see that you genuinely care about their children and provide quality care, then they aren't the type of clients you really want.

You want clients that respect what you do and realize they ARE paying for what they get.

It'll be okay.

Plus notifying parents of changes gets easier and easier every time.
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