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Old 03-12-2013, 12:25 PM
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Default How Much To Raise Rates?

I will have been open for 1 year in August and thinking about raising rates. What's typical? I charge a daily rate for 9 hours a day. The rate is $55 for under 2 and $50 for over 2. I'm noticing other providers in my area going up to around $60 a day for 8-10 hours a day for a 2 year old. I think that would be too big of a jump for my clients. I was thinking of upping my rates by $5/ day. What do you think?
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Old 03-12-2013, 12:43 PM
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Prices differ so much around the country. Around here, I'd be rich at what you're charging now!

If your rate is lower than the average for your area, then you should be able to raise it without a problem.
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Old 03-12-2013, 12:47 PM
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Prices differ so much around the country. Around here, I'd be rich at what you're charging now!

If your rate is lower than the average for your area, then you should be able to raise it without a problem.
I agree. My drop in rate is newly raised to $25/day... A $5/day rate increase is an extra $25 a week. That sounds like a lot to me, but it would depend on your area and your clients. If you are on the low end of the area, I think an increase is reasonable. Be prepared to have a few clients leave if they can't afford the price increase, especially since you've only been open a few months.
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Old 03-12-2013, 12:55 PM
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Originally Posted by Unregistered View Post
I will have been open for 1 year in August and thinking about raising rates. What's typical? I charge a daily rate for 9 hours a day. The rate is $55 for under 2 and $50 for over 2. I'm noticing other providers in my area going up to around $60 a day for 8-10 hours a day for a 2 year old. I think that would be too big of a jump for my clients. I was thinking of upping my rates by $5/ day. What do you think?
Your prices are almost double the low end of my area, but again regional pricing differs so much. Are you raising the rates for current families or only for new clients? How many open spots do you have? $5 a day just seems a bit excessive-it's about $1300 more per year. Be prepared to lose clients. It seems more fair to raise your rate to $57/day to have a $10 weekly gain. But hey, whatever works for you!
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Old 03-12-2013, 01:04 PM
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I agree. My drop in rate is newly raised to $25/day... A $5/day rate increase is an extra $25 a week. That sounds like a lot to me, but it would depend on your area and your clients. If you are on the low end of the area, I think an increase is reasonable. Be prepared to have a few clients leave if they can't afford the price increase, especially since you've only been open a few months.
Ok, wow. My drop in rate is $15 per hour for 1 child and $3/hour for each additional child and this service has been used many times.

I do live in one of the most expensive states for childcare but also cost of living here is ridiculous!
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Old 03-12-2013, 01:08 PM
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Your prices are almost double the low end of my area, but again regional pricing differs so much. Are you raising the rates for current families or only for new clients? How many open spots do you have? $5 a day just seems a bit excessive-it's about $1300 more per year. Be prepared to lose clients. It seems more fair to raise your rate to $57/day to have a $10 weekly gain. But hey, whatever works for you!
You're right $5/day is too much. I like your idea of $2/day. If I raise it for all my families I will wait until January to do that. I do have a new family starting in July (wouldnt be fair to raise their rates one month after starting) and one in September (again the same thing).

Do you guys normally raise rates for everyone at the same time (new families and existing ones)? Or do you leave existing families alone and only raise rates for incoming families?
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Old 03-12-2013, 01:11 PM
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You're right $5/day is too much. I like your idea of $2/day. If I raise it for all my families I will wait until January to do that. I do have a new family starting in July (wouldnt be fair to raise their rates one month after starting) and one in September (again the same thing).

Do you guys normally raise rates for everyone at the same time (new families and existing ones)? Or do you leave existing families alone and only raise rates for incoming families?
I personally leave the old families at their old rate. New families at a new rate. This may be another option for you too. The newer families could come in at a higher rate...
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Old 03-12-2013, 01:13 PM
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Wow! Thats a lot of money! I was charging $20/day if the parents provided food, and $25/day if I did. I recently just upped it to $25 for all families with no food option - they must eat what I serve.
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Old 03-12-2013, 01:25 PM
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Try looking at it from different angles too. Try looking about your weekly (or even monthly) income total and consider setting a goal for how much you would like a family to pay each month or use a small percentage of that.

$55/day (for 5 days a week)= $275 a week x 52 week/ 12 months= $1,191 per month. Maybe consider it a goal to get to make $1,200 per month for infant familys so only about $1.50 more a week to make that goal. or do a percentage rate increase by 1% (since it is high) $1,191x 0.01= $11 more a month or about $2-$3 more a week.

$50/day (for 5 days a week)= $250 a week x 52 wks /12 months= $1,083 maybe your goal for now can be to make about $1,090 for toddler and up families so about $2.50 a week to make that goal. $1,083x 0.01= $10-$10.5 morea month also about $2-$3 more a week.

Or you can just charge an extra $1 a day and for full timers would make an extra $5 a week (adds up to about $20-$25 more a month) per family.

I wonder where you live where parents are able to afford these rates for daycare- that is a months rent/morgage where I come from! Your daily tuition rate was what I was thinking about charging (per WEEK!) when I start and then just slowly every year or two either an extra $1 a day or $5 a week or a small percentage (1%-4%). Since I plan on starting low I would probably also make sure that parents understand going in that I will increase my rates every year or two if needed- but not drastically. Remember that 'you also don't want to raise your rates so high that you price yourself out of the market' (as one of my teachers who is an ex-FCCP would say)
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