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  #1  
Old 10-05-2011, 07:29 AM
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Question Contract Changes And Rate Increase

I logged out but am a frequent reader/poster.

I am having trouble with the "search" feature and I know people have posted on this before but I cannot seem to find much on the topic.

I have been in business several years. I have adjusted my contact yearly. I made the huge mistake of starting my business with extremely low rates for fear no one would come. That backfired. I have had the same clientelle (except for a very few families) from the onset.

I have done yearly increases with at least a months' notice. At the most, the increases have been about $1.25 per week. I also give super-substantial sib discount which I KNOW I never should have started. I also offered MANY sick days for the families and minimal paid time off for this provider.

I recently came across the county numbers for FCC providers and I am far below the average daily rate for one child, let alone two or more.

Most of my families have multiple children in my care so I am bringing in low dollars based on the above.

It's almost time to redo contracts. I am seeking advice on the following:

1) Can I eliminate the sibling discount after all of these years?

2) Can I stop doing the sick days?

3) How much is too much (per week) to raise rates? I charge weekly tuition. The most increase would be to one family of multiple children at a rate of about 3.35/day (16.75/week). The least would be 1.56/day (7.80/week).

Give me your honest opinions on this please.
Thank you!
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  #2  
Old 10-05-2011, 07:40 AM
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You can do whatever you want! I do not offer any discounts, any unpaid days for the parents. $16 a week is not too much of an increase. The most I have ever done is $10 a week and had no issues from parents about that. I think you should change everything now so everyone is paying the same amount and on the same plan. You may lose a family but more than likely, you won't. Even if you do, replacing a family will be much better than continuing to lose loads of money on all the discounts indefinitely.
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Old 10-05-2011, 07:44 AM
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I would make a new contract, blame on licensing if you want, and make it effective January 1, 2012.

Drop sibling discount, I personally do 5 personal days I call them that the families get "free" a year. These can be vacation/sick days, etc.

I think if you give them enough notice raising by $10 would be fair since you are so low compared to others in your area.
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  #4  
Old 10-05-2011, 07:48 AM
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Last January I went up $10 a head/per week, added paid National Holidays, eliminated sibling discounts (for new clients) AND tightened my illness policy.

I gave the new contracts out in early December to be in effect Jan. 1st.

I gave them 2 weeks to have them turned back in, with each section initialed, with the final clause being "Failure to return contract by **** will be deemed notice of intent to relinquish your child's slot as of Jan. 1st. All relinquished slots will be filled by the first applicant from the waiting list."

I did not lose a single client.
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Old 10-05-2011, 08:21 AM
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I wouldn't charge more than $10 per week or you take the chance of people leaving. But, if you are well below the average, I would explain this to these families.

I would write up a letter something like this:

Dear Families,

Effective January 2nd, all contracts with the daycare will be changing.

Please make note of our new changes:

We will no longer offer sick days. You will pay a flat rate each week regardless of attendance. (This will make your accounting process much easier as well!)

Sibling discounts will change to 20% off the 2nd child. (Or in your case, change it to no discount if you'd like.)

All rates will increase $10.00 per week per child. This increase is equivalent to $2.00 per day or 20 cents per hour and is still well below the average rate in our area. (Add this in there...most parents don't like to see the big number but when you break it down for them, they don't see it as being too bad.)

I increased my rates $5.00 a week across the board and never had anyone flinch. Most families understand the cost of everything has gone up...it's just keeping up with the times.
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  #6  
Old 10-05-2011, 05:04 PM
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Similar posts from earlier: https://daycare.com/forum/tags.php?t...e+notification
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Old 10-05-2011, 05:12 PM
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I think you should make whatever changes you see fit. I like doing mine at the first of the year. In the past I have given them out in Jan to go into effect in FEB. this gives them time to recover from the holidays.

This year, I will not be increasing the rates, however, I will no longer offer sibling discounts, the 3 free sick days per year or any other discounts.

I am sure that some people will be upset about it, but at this point, I need more for me. I do way too much for everyone else.
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Old 10-06-2011, 06:11 AM
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I think personally I would leave in the sibling discounts for current families. Or maybe reduce the discount, but not eliminate it completely.

As for the other things, I think I would do it gradually. If you eliminate sibling discounts, sick days, and raise rates all at once it seems like a lot. It *is* your business and you can do what you want, but I think off of it at once is a lot.

JMO, since you asked
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Old 10-06-2011, 06:26 AM
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I offered a sibling discount because one client practically threatened to go else where if I didnt. I wish I never did because the child is still taking my full time spot.
I would lower the discount and then maybe eliminate it in 6 months or so.

Also, like catherder said have a date that they must have the contracts in by. And if it were me and I was increasing rates and not sure how families would respond, I would place an ad or some type of advertising and do some interviews just in case.

Good luck! I hope everything works out. Nothing will change unless you change it!
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Old 10-06-2011, 07:31 AM
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Quote:
Originally Posted by daycare View Post
I think you should make whatever changes you see fit. I like doing mine at the first of the year. In the past I have given them out in Jan to go into effect in FEB. this gives them time to recover from the holidays.

This year, I will not be increasing the rates, however, I will no longer offer sibling discounts, the 3 free sick days per year or any other discounts.

I am sure that some people will be upset about it, but at this point, I need more for me. I do way too much for everyone else.
So, did you just leave the sibling rates at the same amount or did you raise one sibling to get rid of the discount? I'm just not sure how to do away with it for the ones already in care. Like say one sibling is $15.00/day and the other is currently at $30.00/day .... I need to do an increase but cannot figure this out. Sorry so many questions..
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Old 10-06-2011, 10:24 AM
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Quote:
Originally Posted by Unregistered View Post
So, did you just leave the sibling rates at the same amount or did you raise one sibling to get rid of the discount? I'm just not sure how to do away with it for the ones already in care. Like say one sibling is $15.00/day and the other is currently at $30.00/day .... I need to do an increase but cannot figure this out. Sorry so many questions..
I would raise each child 5 per day,.. I would just send out a notice that says, due to increased costs for supplies , food , and utilities I need to raise the rates for childcare. I understand this is an inconvenience but I refuse to lower the quality of care in order to keep fees where they are. I hope you understand. I know this may not work for some families and understand completely if you need to find care somewhere else. I do hope you stay because your child is important to me.
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Old 10-08-2011, 07:08 PM
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Question More contract questions

Thank you for all of the advice and thanks to Michael for the links to the posts!
Another question for you all...I have two families who always ask me in mid-October if my rates are going up and if so how much.....In the past, I didn't decide this until close to the end of November then I sent home contracts first business day of December with any changes noted and asked for those contracts to be turned in before end of year. I don't like being put on the spot but I know those two families have that flex plan thing where they are supposed to turn in their numbers to their workplace.

Should I hand out contracts first business day in November and just give them two weeks and tell them changes won't go into effect until new year? I don't want them holding the contracts for a month anymore either.

I still am torn on what to charge and I am thinking of modeling what several of you do as well as NannyDe on consistent payments throughout the year. It seems like it would be much, much easier.
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  #13  
Old 10-09-2011, 10:12 PM
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1) Can I eliminate the sibling discount after all of these years?
Do you charge $30 for the first child and only $15 for additional children? That is 50% off siblings. I would change that to 20-25% off siblings...whichever percent turns into an even number more easily.


2) Can I stop doing the sick days?
How many sick days do you offer? Do you offer yourself any paid holidays or sick days? A better point of view would be to add paid holidays or some paid closed/personal days for you. This way they read it as FREE days for them, not that you're adding more paid personal days....it's all the same in the end.


3) How much is too much (per week) to raise rates? I charge weekly tuition. The most increase would be to one family of multiple children at a rate of about 3.35/day (16.75/week). The least would be 1.56/day (7.80/week).
What is your weekly rate? If you charge $30/day for 5 days a week that is $150 per week. If you raise it $10/week or $2/day that is only a 6% increase which is standard.



Quote:
Originally Posted by Rachel View Post
I think personally I would leave in the sibling discounts for current families. Or maybe reduce the discount, but not eliminate it completely.

As for the other things, I think I would do it gradually. If you eliminate sibling discounts, sick days, and raise rates all at once it seems like a lot. It *is* your business and you can do what you want, but I think off of it at once is a lot.

JMO, since you asked
I agree with this completely and partially explained above. How many families do you currently have and how many of those families have 2, 3, or 4 children? If you bring down your sibling discount to 20-25% instead of 50% (if that is your discount now) then I would raise rates on just single families by $10 a week or $15 per week. Just make sure you don't have a HUGE gap because those with multiples shouldn't receive extremely cheap rates compared to single child families.
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  #14  
Old 10-09-2011, 10:24 PM
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it also depends on what it is like to get new families in your area. if it is slim-pickings, I would keep the changes to a minimum. if it is somewhat easy to interview and begin with new families, now is the time to overall everything.
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  #15  
Old 10-10-2011, 06:52 AM
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Your daycare is your BUSINESS. You can operate it however you want. I would not offer sibling discount(s) or unpaid sick time out from care. Your current daycare arrangement is not working out for you...change it so that you can benefit.
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Old 10-10-2011, 09:18 AM
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Quote:
Originally Posted by Unregistered View Post
Thank you for all of the advice and thanks to Michael for the links to the posts!
Another question for you all...I have two families who always ask me in mid-October if my rates are going up and if so how much.....In the past, I didn't decide this until close to the end of November then I sent home contracts first business day of December with any changes noted and asked for those contracts to be turned in before end of year. I don't like being put on the spot but I know those two families have that flex plan thing where they are supposed to turn in their numbers to their workplace.
Should I hand out contracts first business day in November and just give them two weeks and tell them changes won't go into effect until new year? I don't want them holding the contracts for a month anymore either.

I still am torn on what to charge and I am thinking of modeling what several of you do as well as NannyDe on consistent payments throughout the year. It seems like it would be much, much easier.
For the families that are on Flex Spend, if they ask about changes, I would simply say "I will let you know as soon as I know." If they start explaining that they need to know sooner rather later, I would just stand my ground and say again "I will let you know as soon as I know."

I understand they want to know right away but as long as you are giving notice in beginning of December for changes coming up a month later, I think you are fine. A month is a lot of notice and the families using flex always underestimate anyways so I wouldn't let them push me to make announcements any sooner than you already do.
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  #17  
Old 10-10-2011, 10:59 AM
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Quote:
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I still am torn on what to charge and I am thinking of modeling what several of you do as well as NannyDe on consistent payments throughout the year. It seems like it would be much, much easier.
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