GAH! I screwed myself...Help!!!

Back story: Signed a family up 4 months ago as I just started (they were my very first tour, I never did daycare before) Schedule is 2 days a week with alternating Monday and Friday every other week. I was so excited to have a tour I took it and was happy to have them. At that time my Rates were:
Newborn-2 years old
Full-time max 50 hours per week: $250
Part Time max 30 hours per week: $200
Drop In full day: $60

They asked to do the Drop in for 120 a week, me being excited I said sure. It didnt dawn on me that HELLO I screwed myself there. Drop in isnt every single week and drop in isnt guaranteed.

So I wrote them a letter to raise their rates. This is what i gave them:

Dear Husband & Wife,
Due to Child's alternating schedule I am forced to secure three days a week even if he is just attending two of those days. If we continue alternating Mondays and Fridays every other week I will need to increase the weekly tuition by $60, the per day rate. If you would like to switch to a set weekly schedule, where he would be attending the same two days every week you may do so without an increase. The new rate will be effective February 1st 2013. Your new weekly rate will be $180 per week plus the $2.00 per week fee for the wipes. Please return a signed copy by January 15th 2013. If you have any questions please feel free to ask.
Thank you,

Providor

I, ___________________________________ agree to pay for additional day at a rate of $60 per day for daycare. Effective February 1st 2013.

Signature/Date


I, ___________________________________ agree to change Child's daycare schedule to two consistent days per week effective February 1st 2013. (please circle two days)
Monday Tuesday Wednesday Thursday Friday

Signature/Date


Then DCD comes at pickup while I was getting child ready and asks about bringing child in for 3 days and paying 180. *while child is screaming in my face* I say uh huh yeah. DCD takes baby and signs out and leaves. They leave 20 min later it hits me and i'm like OOOOHH NOOO! I email DCD this:

Hello DCD!

Sorry but when you asked earlier in regards to bringing Child 3 days a week I didn't get a chance to stop and actually process your question. I do have space available for Child to attend 3 days a week and I agree I think it would be better for him to have a set schedule. My current rate for an infant at 3 days is $250 per week. I wasn't aware that you would want him to attend 3 days a week so that is why I didn't have it as an option in the letter. We can discuss this further by scheduling a time either after daycare hours or via email.

Warm regards,

Provider

DCD comes today leaves me two letters (a Christmas card and a tuition letter) I read tuition letter when father leaves and it pretty much states they dont want to pay 180 for two days with m&f alternating but they will pay 180 for child to attend 3 days.

This is what I am considering responding:

Dear DCp's
When you enrolled Child, you signed up as a “drop-in” and that fee was 60.00 per day. Since Child does attend on a regular basis week to week he is not considered a “drop in”. I apologize, but when you originally signed up you should have been paying the “max of 30 hours per week rate” which was 200.00 a week at that time. As a “drop-in” space isn’t always guaranteed, but I have been securing Child’s spot at West Town Daycare for regular attendance. In the email I sent to you on 12/19/12 I quoted the current three-day rate, which is $250 per week, that is why there was a big jump from your drop-in rate for two days of $120. This is strictly a business decision and I need to maximize the space that I am allowed. I decided to only increase your rate by the per day rate that you are paying because I didn’t feel that it was fair to increase it to what is was at the time when you signed up and especially what the rate is now. I felt that increasing it by $60 for the two days with the alternating Monday and Friday was fair for both of us. My offer still stands as 180 for 2 days with Monday and Friday alternating or 3 days at my current rate of 250 per week.



Now my thought is hey you're paying a drop in rate(an OLD drop in rate) and drop in isnt guaranteed, I think they will GET IT if I say sorry January 17th is not available. Your child cannot attend.

Is my response back fair? is it clear? i want to be firm. WHat they are paying now is DIRT DIRT cheap in my area. The low end here is 1450 a month for an infant PART TIME.


Should I just term and say see ya?

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I'm sorry, not picking on you, but the system you have is so complicated, I can't follow it. If up to 30 hours is $2oo, and drop in care is $60 per day, how is 3 days $250?

I am not picking on you...just saying it's confusing...


and....I'm really, really, really jealous of your rates!

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Yes, I do not understand.

My part-timers that come 3 days per week (M/W/F) pay $100.
My part-timers that come 2 days (Tuesday/Thursday) pay $65.
My full-timers pay $145.

If I had a drop in spot, I'd charge $50.

But, it doesn't get broken down any further than that.

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I'm not getting it either. Also 2 days for $180? That's $90 a day. Even drop in is $60 a day. Not understanding it either.

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I know I'm so bummed about this I don't make any sense.
Okay so my original rates when I first started in Aaugust was:
Newborn-2 years old
Full-time max 50 hours per week: $250
Part Time max 30 hours per week: $200
Drop In full day: $60
This DCF signed on for two days a week with alternating Mon and Fri but as a drop in. I always saved their spot as a regular family even if they were paying a drop in rate. Well now that I'm filling up and space is limited its really messing me up.
Since August I raised my rates to be more competitive for my area. Which is currently:

Enrollment Options:
6 weeks – 2 years old
5 Days a week $325
3 day $250
2 days $170

2 years old and up
5 days a week $250
3 days a week $200
2 days a week $150

Before and after school care (includes afternoon snack)
$30 per day

Transportation available
$5 additional per day

Additional options may be available



Does this help a little. In my head it alleles sense but I am having a hard time wording it.

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I was increasing by their per day rate for the 1 day a week that alternates.
Mondays and Fridays alternate every week so I have to hold 3 days every week for them even if they use only two. Does that make better sense?

Thanks for everyone's responses.

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I sound like my 2 year old that was a run on and a half...

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I still dont get....I am guessing this family is confused as well and that is why they are negotiating.

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I guess part of what is throwing me is that you are saying in one part that 3 days is $250, but part time 30 hours is $200. How many hours are you open a day because at 10 hours a day 30 hours would be 3 days.

I understnad them having to pay for 3 days even if they only use 2. I do that with one family too, but that still would only be $180 if you did the drop in 60 a day or at most 200 if you did 30 hours.

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Also you said that you started these people 4 months ago and then increased rates in August. So, you started them and literally right after that increased the rates?

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It wasn't immediately after. When I first started my rates were really low and I messed up on my drop in rate. my drop in rate was too low and that what they signed up for. Drop in at 60 a day. But drop in isn't everyday every week. I increased their rates because in order for him to come I have to hold three spots but they are paying for 2(at my old rate). I quoted them 250 for three days because that is what my current rate is. They should have never signed on for drop in because is reality if they truly are drop in then the space isn't guaranteed all the time. its per availability but i've been turning down families that need full time because I cant take them because of the DCF odd schedule. I raised their rate by THEIR per day rate to make it a little fair for myself but not term them or make them pay for three days. Even if I charge them what they should have been paying then they are still saving 20 bucks a week.
two months after doing daycare i switched my rates from hourly to daily.
for a MAX of thirty hours the rate was 200 a week.
these are not my rates now.


Thank you to everyone who is sticking around trying to decipher this hot mess i created.

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This is EXTREMELY confusing. There are a couple of different things going on.
1. You accepted them as drop-in but then tell them later in the letter that they should have been paying the part time 30hr rate. If you told them drop in rate was fine that was your decision and thy should not have been paying parttime rate. It was your choice to give them what you now feel is a deal. They shouldn't be made to think they did something wrong.
2. That is a huge jump in price over a very short amount of time. I can see why they would be upset.
3. If drop in is available as an option why can't they have the drop in rate at the drop in rules? This is your rate but space is not guaranteed. You chose to hold the day for them at your financial loss but that is not their fault.
4. If they have to commit to 3 days a week is it offered at the rate for 3 days from the time when they joined or the new 3 day rate? Many clients would be upset at a huge hike after only a few months, especially as they probably would have chosen 3 days set rate in August if they knew an increase was coming if they changed their mind in December.

If you like this family I would try to work something out otherwise state that the only options are: current 3day rate or dropin with no spaces guaranteed and see if they stay.

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I agree with above. I'm still somewhat confused. There are so many rates going on that it is confusing. I apologize. That is why I keep it simple for myself. I charge $35 per day for any age no matter how many hours. I do agree that if they want you to hold that 3rd day in case they need it then they do need to pay for it whether they use it or not. If they dont' want to do that, then have them pay for 2 days, but fill the other spot if you can. I have 1 family that sometimes only needs 2 days a week, but they guarantee me payment for 3 whether they need it or not.

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Gotcha. You're right.

So I think I will just say That I agreed to do a drop in rate but its based off of drop in rules, like you said. If I have space available then I'll take him at the original rate if I dont then he cant come. Is that fair? How can I word it to them to where its fair. I want to be fair with this family, they are nice and pay on time. How can I word this to the family?

I screwed myself in the beginning when my rates were posted on my website without doing enough research prior.

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Dear daycare family,

After some confusion I thought I should clarify the options available to you:

1. Drop-in
Drop-in care will be available at your joining rate of $60/day for an x hr day. (eg. 8 hrs then you can choose if you want to offer additional hours at an additional hourly rate if they need longer - this way too it's $180 for 24hrs of care which makes more sense than 30hrs parttime is $200 and 30hrs @ 10hr days x 3 days of dropin care is only $180) Care is available on a first come first served basis. Once booked that day is yours and as such payment is due whether or not your child attends. Days cannot be booked more than x days in advance. Payment is due xyz (weekly? In advance?)

2. Part-time care
Up to 30hrs a week over 3 days for the joining rate of $200. Days and times are contracted to be the same every week. There is no substitution should your child not attend. Payment is based upon enrollment not attendance. (then put in something about what stats/vacation pay/sick pay etc you expect them to pay). Payment is due xyz.

I really appreciate your family and hope we can work something out.

DCP

******

I'm really tired so this isn't the best letter but maybe build off something like this? Hope this works out for you!

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That is prefect. I can't thank you enough.
You really made this confusing mess clear to me. I don't think I even understood what I did.
Thank you too everyone else who took their time and read this loooooooong post.

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Ok I get it. Word the letter to them like this:

Dear dcf,
Giving you a heads up. You are enrolled under my drop in program but my slots have filled up fast and very soon those days won't always be available. Just want to be sure you have backup care ready in case. Or if you prefer you can enroll under x or y program. Let me know thanks!

Then be sure to let them know when they contact you or try to drop off dck you are full today and there's no room. They will get it then. Yes drop in is cheaper for them but not garunted a spot. If they'd like to reserve a spot in your program they need to enroll under full time or part time program. Since they need you on alternating days they need to reserve each day they might need you. They'll pretend to not get it even if they do, nobody wants to pay more!

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I haven't read everyone's responses, but I would take a set schedule of 3 days per week at $180 and honor this family as your FIRST family, and allow time to slowly phase them out of your program.

They were your FIRST family, and they really are not asking for much. Good business practice says that you should take care of those who take care of you.....I promise you, in time, your accomodation for them will pay you back tenfold.

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LOVE these two ideas !

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Wow, just want to say I'm jealous of your rates! Here, I get $34 full day for babies under 18mths, $30 for 18mths and up for 8.5 hours a day! Before and after school is $17.

You must live in a big city!

Did you give them a copy of the new rate schedule? Are you almost full with lots of opportunity to fill the spot? Is the child a problem child? These are all things you need to consider before changing their rates.

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What I ended up doing was saying HEY you're a drop in and daycare isnt secured. If you would like to secure your spot with me this is that rate(which I kept to my old rate before I raised them the final time)They said they were thinking about it and we'll go from there. I am trying to work with them as much as possible but I was really bothered by there letter that they wrote to me. Pretty much telling me what to do and trying to control the situation. The child is 5 months and is a bit of a crier. Has strong lungs and screams VERY LOUD. Most times if I have a full house and DCB I have to have my fiance or assistant present because it takes the lil guy an hour to settle down. I am filling up, I have been keeping this spot for them even as a drop in for a while. But I feel like we are working together on the rate and spot issue.
Yeah the rates are nice but cost of living is expensive. I live in Chicago just a few miles from downtown. My rates are on the high end of middle. There are plenty places more expensive then me.


Thanks for everyone's input!

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I think in this situation you quoted them a price that you now feel isn't fair ... it's a rookie mistake and totally understandable. We have ALL been there done that. I don't think that it's the family's fault at all so I do not feel that raising their rates immediately is a fair thing to do, after all you quoted them.

So now to fix the problem I think that if I were in your shoes and I had someone interested in that spot which was a guaranteed full or part-time client then I would first offer that spot to your drop-in client and if they refused then I would hand them a 2 week termination notice and replace them with either a full or part time client or a drop-in client that can pay your higher (correct) rate. I would give them a 2 week notice out of courtesy because they were not out to "get" you, you simply realized that you weren't charging them enough.

In the mean time it's time to change your policies a little bit. In my handbook I specify how my priority works for clients. I make it clear that it's my intention to fill my spots with regular clients needing the most number of hours and therefore those clients have priority. Here's an example of what I have in my handbook:

Priority
Priority for available spots is given first to families already enrolled however having priority does not guarantee that space will be available when needed. If space is still available and none of our currently enrolled families or those families on our waiting list show interest in the available spot we will then openly advertise in an attempt to fill the space.

It is our goal to have the highest amount of regular full-time clients as possible therefore we strive to fill all of our openings with full-time and part-time clients needing the most number of hours per week first then followed by drop-in clients.

Drop-in clients are limited to availability however we are loyal to our drop-in clients and in situations where an un-enrolled family is interested in a full-time or part-time position that a current drop-in client has, every effort will first be made to offer our drop-in client the opportunity to secure their space by upgrading to the full or part-time position.

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Rookie mistake for sure! Yes i just realized that is exactly what I am missing from my handbook. I have a lot of updates to make for the new year.

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I'm coming to this late, but I had a comment.

Your drop-in families are getting a bargain! I charge a premium for anyone using less than full-time to make it worth my while and to encourage families to go full-time. That way, if I don't fill the rest of the days I'm not out as much money. Also, part time kids can be a pain in the butt, :0) so to compensate I charge them a premium (they don't always fit into our schedules, etc.).

My current full-time rate is $200 per week. I charge $75 for one day, $125 for two days, $150 for three days, and $175 for four days.


One other thing I've learned over the years is not to give an immediate answer when a parent asks me a question about things like rates. I always say I'll check in to it and get back to them the next day or in a few days or whenever. That way I can take my time to figure it out and I'm not pressured to give an answer immediately. I've never had anyone get upset that I couldn't give them an immediate answer.


I hope things work out well for you with this family! :0)

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