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  #1  
Old 04-20-2010, 08:48 AM
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kpa0627 kpa0627 is offline
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Default Rate Increase Letters

I am a registered provider right now but am moving to a bigger house and becoming a licensed provider so I want to raise my rates to match what the other licensed providers are. Right now I charge $125 a week for 0-2 years and $110 a week for 2-5 year olds. I charge $67.50 a week for 0-2 years if they are 25 hrs. or less a week and $55 a week for 2-5 year olds if they are here 25 hrs. or less a week.
* My rate change plans are:
Full Time- 0-18 months (changing age) $135 instead of $125
Part time- (up to 25 hrs.) $85 instead of $67.50

Full Time- 19 months-5 years (changing age) $120 instead of $110
part time- (up to 25 hrs.) $70 instead of $55

Does this seem like a drastic change? I don't want to make parents angry but I also need to match what the other providers get per child.

*How should I word a change of rate letter? It will come effect July 1st... should I go ahead and send out a letter so they know or should I wait? Anyone had any problems raising rates before? I'm just kind of nervous about it for some reason.

Also, when I first opened I offered a 10% discount off of rates for military families, families with more than one child in care, and parents who were in college. Should I keep this discount or get rid of it completely? I want to be fair but I need to make a living too.
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  #2  
Old 04-20-2010, 09:16 AM
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MarinaVanessa MarinaVanessa is offline
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Honestly if I were a current family and I found out that I would have to pay an additional $10 a week right off the back I'd be a little hesitant. That's an extra $40 a month. If you have already spoken to them and they are ok with it and will follow you anyway then great! But if you have not I would talk to them about it first. If it's a big jump for them you can propose a $5 hike this year and then another one next year (or even a $3 one next year and a $2 one the following year until it's caught up) and any new families starting off can start at the new rate. Who knows though, maybe your families won't give you trouble at all and it won't be a problem.

As for the discounts I would just do away with them altogether maybe exept for the sibling discount. You can offer your current families a one time discount if they refer a family and they sign up and stay with you over four weeks as an incentive when you have openings.
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  #3  
Old 04-20-2010, 09:22 AM
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I think a $10/week increase is a bit much for many families. I would definitely speak to them in person about it rather than communicating the increase in a letter, but honestly, I would expect some families to leave over that much of an increase.

As for discounts, I don't offer them any longer. A sibling takes up a roster space, and as I'm only allowed #6 spaces, I need to maximize my income if I've any hope to staying in business.
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Old 04-21-2010, 11:38 AM
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Default Rate increase

About a year ago I raised my rates to fit what my community was charging. I raised it $25/week. I now charge a flat rate of $25/day with a $10 discount for each sibling. I was charging $20/day. All the families stayed and wondered why I didn't raise them sooner. If you give great care, you should have no worries.

Good luck!
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Old 04-21-2010, 12:56 PM
DBug DBug is offline
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Wow, you raised your rate by $25 per week (as in $5/day?). That's encouraging. I'd like to raise my rates soon. I know I provide good care, better than other home daycares in this area, but I'm still nervous about doing it. And I was going to raise them by $5/week ... or discontinue the rate drop after a child turns 2 (which means parents would continue paying $150/week, instead of going down to $125).

Anyway, you've given me hope that my parents won't all desert me over a rate hike Thanks!
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Old 04-21-2010, 02:10 PM
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Personally, I wouldn't reference the new house or the fact that now you are licensed as a reason to increase rates. I'd just say something about increased costs. I wouldn't do it within a couple months of the move though. Parents will make that connection on their own. If you haven't moved, raise them now before the new home comes into the picture.

I had a family once come to me with a list of things I could do to reduce my costs so I wouldn't have to raise rates. Including having my children work (for free, like farmers do in a family business) instead of having an employee. Since then, I try very hard to keep all my personal expenses completely absent from conversations with customers.
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Old 04-21-2010, 02:41 PM
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Quote:
Originally Posted by DBug View Post
Wow, you raised your rate by $25 per week (as in $5/day?). That's encouraging. I'd like to raise my rates soon. I know I provide good care, better than other home daycares in this area, but I'm still nervous about doing it. And I was going to raise them by $5/week ... or discontinue the rate drop after a child turns 2 (which means parents would continue paying $150/week, instead of going down to $125).

Anyway, you've given me hope that my parents won't all desert me over a rate hike Thanks!
My rates are $140.00 til potty trained- then $130.00/week. I used to have $130.00 when they turned 2, but the last 2 yrs. I have done til potty trained, this has worked so much better. Potty training can be a difficult process, so I figured to keep it at $140.00 til completely potty trained .
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Old 04-21-2010, 04:09 PM
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I agree $10 is a bit much for most parents. I do not raise my rates until the new year which is the same time I have everyone sign a new contract with an updated policy. When I raised my rates I only raised about .25 a day.
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  #9  
Old 04-21-2010, 04:39 PM
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I went from $125 to $135 a couple of years ago, this year I went to $140...so far I have never had anyone complain or leave...
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  #10  
Old 04-04-2011, 04:11 PM
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Default I think the increase still wasn't enough

It's 2011. And if anyone can't take you raising your prices to heck with them. Taking care of children all day is a lot of work! And if the parents don't understand that, then they should stay with their on children.
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  #11  
Old 08-08-2011, 10:58 AM
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Thumbs up Significant rate increase

I have been a provider for just 2 1/2 years. When I first began I wasn't sure what would be reasonable considering my experience (so I really low balled). By the anniversary of my 2nd year I had a waiting list. I go above and beyond for my parents! Field trips, yoga, professional puppets show, character visits, etc. Not to mention all the training my assistant and I partake in each year. I was quite nervous about increasing my rate but I had to do it. It went from $185 infant/toddler - $165 preschoolers to $245 I/$225 T/$200 P. I did research on lots of other daycares and they were not offering even half of what I offer as far as curriculum, progress reports, and activities (I explained that the increase helps to maintain quality). I am on the verge of accreditation and felt comfortable in my decision. When I finally raised my rates, alot of families said that they expected it with all that we do. I didn't lose anyone and I didn't get any complaints. I'm not sure how everyone felt but it worked out. I plan to do a evaluation for my program soon... so maybe I'll find out about any issues then.

I say go for it! Good luck and best wishes.
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  #12  
Old 08-08-2011, 08:51 PM
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Whenever I raise my rates it's by $10/week and never has a parent complained or left. I only raise rates every few years, or when a child is especially difficult! Parents all get raises, so should I. Many of mine raise the rate they pay me without me asking. One family now pays $25/child (x 2) more than my "rate" - I"m not sure they even they know my rate - they pay me what they feel I deserve - which I guess is more than I think I do. Great parents!
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