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Daycare Center and Family Home Forum>Initial Rate... Wanting To Change... How?
lflick 04:40 PM 07-01-2013
Ok.. I know there are a million + posts about this but I am not sure if I have hours to peruse them to find specific advice... I opened recently and have yet to find "ideal" families, full time families, etc.... I have found that in order to cover my costs and make it "worth it" financially what I currently charge is simply not enough.

I realize many do not post what they charge; however, I am looking for some honest feedback on this... so here goes....

Currently I charge $25/day/child.... regardless if they attend one day or five....

I have been reading everything on the forum trying to see other structures to help me with my revamp... after about 5 different "rough drafts" this is what I decided on...
5 days a week $125/wk
4 days a week $110/wk
3 set days a week $90/wk
3 variable days a week $100/wk
Half day $20/day
After school (up to 3 hrs) $50/week
Drop In $35/day

I have more specific hour limitations listed on my formal sheet but I think you can get the just of everything with this list.

Is this too much of a dramatic increase? What do I do about the people that have asked about care at a earlier time? I mean those that have already asked and have yet to contract? Current clients?

I am doing this as many people are seeking a day here or there or say 2 days a week... Just trying to make everything balance.. if that makes sense. Any comments, suggestions, and advice are welcome!
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NeedaVaca 04:50 AM 07-02-2013
I noticed you have posted a lot of threads about rates? Since you already have families you are risking losing them by making a rate change so early on...you need to focus on getting FT families and until you are full you may struggle financially. It takes a while to get full but IMO that should be your main focus now, not changing the rates for the families you already have. If you want to make an increase I would only do that with new families.
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MrsSteinel'sHouse 05:09 AM 07-02-2013
Originally Posted by NeedaVaca:
I noticed you have posted a lot of threads about rates? Since you already have families you are risking losing them by making a rate change so early on...you need to focus on getting FT families and until you are full you may struggle financially. It takes a while to get full but IMO that should be your main focus now, not changing the rates for the families you already have. If you want to make an increase I would only do that with new families.
I agree with this. As you can fill up, you can change your structure but I wouldn't change on people within the year that I just enrolled! If the part-time fits within what I provide and doesn't leave a funky spot I charge one price (my weekly rate divided by 5) I have a couple of families that share a full time spot.
I have my "first kidlet" from when I reopened over 3 yrs ago that is at a slightly lower rate than the rest because I have never bumped her up, but as I have enrolled I increased my price.
And if you have FT people waiting if you need to you can offer a rate increase or terminate the schedules that don't work for you. Just be aware that if people don't think you have treated them fairly, that reputation will be what people hear about.
Step up your program, keep seeking out children that would be a good fit! It honestly took me over 2 years to feel like I had the right mix of kids and even then I have had kids that have left and I have had some bad gaps. I need to keep 4 FT kids to meet my obligations. I always feel like when I am "full" that is my buffer. I can't have I need 6 to meet my obligations because that doesn't always happen and is too much pressure if I loose a kidlet.
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Patches 05:31 AM 07-02-2013
Originally Posted by lflick:
Ok.. I know there are a million + posts about this but I am not sure if I have hours to peruse them to find specific advice... I opened recently and have yet to find "ideal" families, full time families, etc.... I have found that in order to cover my costs and make it "worth it" financially what I currently charge is simply not enough.

I realize many do not post what they charge; however, I am looking for some honest feedback on this... so here goes....

Currently I charge $25/day/child.... regardless if they attend one day or five....

I have been reading everything on the forum trying to see other structures to help me with my revamp... after about 5 different "rough drafts" this is what I decided on...
5 days a week $125/wk
4 days a week $110/wk
3 set days a week $90/wk
3 variable days a week $100/wk
Half day $20/day
After school (up to 3 hrs) $50/week
Drop In $35/day

I have more specific hour limitations listed on my formal sheet but I think you can get the just of everything with this list.

Is this too much of a dramatic increase? What do I do about the people that have asked about care at a earlier time? I mean those that have already asked and have yet to contract? Current clients?

I am doing this as many people are seeking a day here or there or say 2 days a week... Just trying to make everything balance.. if that makes sense. Any comments, suggestions, and advice are welcome!
I agree that you should probably just increase rates for incoming clients and let your current clients be grandfathered in.

I don't do part time so I haven't put much thought into part time rates before. That said, with your rate for 3 variable days, would they not be taking up a full time spot? I mean if they're days vary through all 5 days then shouldn't they pay for a full time spot? kwim?
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AfterSchoolMom 05:55 AM 07-02-2013
I agree about variable days, I'd either not do them at all or charge for a full time spot.
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lflick 08:19 AM 07-02-2013
I have posted many things about rates as it is a HUGE part of the business as a whole. I ask because it is important and I thought this forum was designed as a resource for inquiring minds. I have 2 kids.... 4 hours a day... two days a week... so by no means am I near full... I have had inquires, many, for care beginning in the fall; however, no one has contracted care as of yet. My main concern was if these families that inquired and NOT contracted come back around and are still interested come fall how I present these rates to them. I am not against keeping the current family at the current rate by any means but I was asking what you all have done in a situation like this.
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Blackcat31 08:21 AM 07-02-2013
Originally Posted by Patches:
That said, with your rate for 3 variable days, would they not be taking up a full time spot? I mean if they're days vary through all 5 days then shouldn't they pay for a full time spot? kwim?
Originally Posted by AfterSchoolMom:
I agree about variable days, I'd either not do them at all or charge for a full time spot.
I offer a rate for 3 days and a different (higher) rate for 3 varying days much like the one OP posted.

I charge a bit less than the full time space because to me, it is worth it to have a few days per week with less kids....kwim?

Just wanted to add my 2 cents about the set/varying days and taking up a full time space.
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Patches 09:10 AM 07-02-2013
Originally Posted by Blackcat31:
I offer a rate for 3 days and a different (higher) rate for 3 varying days much like the one OP posted.

I charge a bit less than the full time space because to me, it is worth it to have a few days per week with less kids....kwim?
That makes sense to me.
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daycarediva 10:44 AM 07-02-2013
I wouldn't bump your current families, but I would stick to this for incoming families. Most wanting PT care won't agree that paying for a FT space is 'fair', so I LOVE the higher (daily) rate for PT, then if I don't fill the space, it's not a big deal to me.
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MarinaVanessa 10:46 AM 07-02-2013
Sorry in advance, this got super long.

For me if a child comes to daycare 5 days a week whether they are here 25 hours or 50 hours, I consider it FT. They are taking up an entire spot so I will charge for the entire spot. Same goes for a child that is here 4 days a week. I have not (so far) ever been able to fill the 5th day with another child that only needs DC once a week. For me, I'd prefer that a family not willing to pay my FT rate for 4-5 days a week because they only want to come half days and such move on to a different daycare. For me it's just not worth it.

If a child has a variable schedule (schedule changes every week) then that child is also using up a FT spot and will be charged the FT rate. Again, the same as above. I would prefer that a family move on to another daycare that will charge them for only the days/hours they need than for me to fill it with this family, have a client with an inconsistent schedule and lose out on income for a FT spot when I for sure will not be able to fill the gaps because of their inconsistent schedule.

PT for me is based on the time that the child gets picked up starting from 3pm and the number of days that the child needs DC (same schedule every week). They tell me up front what days and hours they need and I calculate their daily rates to come up with a flat weekly fee.
My Rate Schedule.

Both FT and PT child care is charged at a flat weekly rate that is based on enrollment not attendance.

I also offer families drop-in care if they only want to pay for the days that their child actually needs. Their spot is not guaranteed however. I offer drop in at a full-day rate or hourly rate (minimum of 4 hours).

The funny thing is that BC and I charge similarly for FT and PT rates (different rates obviously but same idea) and I don't see it as charging my PTers less at all. My clients think theh are getting a break but when you calculate the fees by the hourly rates my FT clients pay less hourly than my PTers.

For example:
FT: $165/week/50 hours= $3.30/hr
PT: $40/day (for a full day)/10 hours=$4.00/hr
Then include my drop-in rates ...
Drop-in Full Day: $45.00/day/10/hours=$4.50/hr
Drop-in Hourly: $6.00/hour

So in essence, the more time your child attends daycare the less you pay hourly.

Like I said though, my clients feel like they are getting a deal because they are paying based on their needs.
A FT client will pay $165 a week for 5 days where a PT client that needs 3 full days will pay $120 a week. Yes, my PT family pays less weekly than my FT family but they pay $0.70 more per hour than my FT family and I can fill the other two days with another PT family for $80 per week which fills up a FT slot. I now make $200 a week for a FT spot filled with two PTers where I only make $165 for a FT spot with one FTer. KWIM?

To find your own rates you should first figure out how much you would like to earn per FT spot. I found my base rate by figuring out how much I wanted to make a year whih would cover enough for me to pay for my expenses and contribute to my household, then I divided it by four children. I picked four children because my max capacity is 8 children and I have two children of my own which count against my ratios which leaves me with 6 spots for daycare children. I can then enroll four kids and still be comfortable and the extra two spots would be extra income or I could decide to not fill them. Once you have your FT weekly rate then you can calculate what it is hourly so put a maximum number of hours on it.

My max hours for my FT rate is 50 hours per week and a maximum of 10 hours each day. That gives each parent child care for a full 8 hour day + their lunch hour + 30 minutes of commute time before and after work.

Once you have your hourly rate for FT figured out (remember to charge a flat weekly rate, the hourly FT rate is just so you can figure out the rest of your rates) add a little more for PT to get your PT hourly rate. Now you can decide how you want to handle PT. Do you want to charge per day? Do you want to allow them to change their schedules each week? Do you want to charge a flat weekly rate? etc. Whatever you decide charge by your new PT hourly rate and multiply that by the number of hours you want to consider PT as.

If you want to offer drop-in then you would take your PT hourly rate and increase that. Your full day rate should be more than your PT hourly rate but less than your drop-in hourly rate.

This way people will think they are getting a deal when in fact they are paying more hourly (to make it worth it for you) for the less amount of time they need.

I also agree that the clients you did already sign on should remain at their current rates and that any new clients should be enrolled at your newer rates. You can always raise their rates a bit later on at their 1 year anniversary or at the start of the new year etc or you can choose to keep them at their current rate and not raise their rates and just wait until they cycle out and then replace them with clients that will pay your higher rates.

If you already gave out rates but those people haven't signed on with you yet then still go ahead and set up your new rates and if they come back later and want to sign up just explain that the rates you quoted before were your introductory rates which you no longer have. Think of it as a special that has since expired.
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Blackcat31 10:49 AM 07-02-2013
VERY nicely explained MV!
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Familycare71 10:58 AM 07-02-2013
Originally Posted by Blackcat31:
VERY nicely explained MV!
Agree!!! It helped me too!!
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lflick 04:12 PM 07-02-2013
Thank you so much for your explanation MV! In my case, I appreciate lengthy! I am trying to learn through experience; however, speed up the process a bit and to gain some perspective and you definitely offered that! Thank you!
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AmyKidsCo 04:17 PM 07-02-2013
Originally Posted by Blackcat31:
VERY nicely explained MV!
Wow! I've been in FCC for 18 years and never thought to do it that way. Our CCRR has a list of averages, plus highest and lowest rates in our area and I based my original rates on that, then raised them regularly.

I'm going back to do it YOUR way when I raise my rates this fall!
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