Default Style Register
Daycare.com Forum
Daycare Center and Family Home Forum>Rates...
Sumshine 07:49 AM 02-20-2017
So I know I am way under selling myselF for rates. I have learned from interviews and from a few providers letting me know that I am any where from $10-30 a week cheaper than average in home costs for my area. I have only been open a few months so there's no going back with my current families but moving forward I want to obviously make sure I'm not under selling myself anymore especially since I pride myself on having a very active program with the kiddos and we do SO many activities and stuff gets expensive quick!

I am thinking of also doing not quite contracted hours but care cost based on hours present because I am having parents not pick up at their scheduled times and kids are here just way too long it's starting to get a little ridiculous. I am open 12 hours and most kids are here 11-11.5 hours!!! ALL of them! I literally have one mom who goes to the store after work every day for at least a half-hour or more and shows up five minutes to close when they are scheduled to be picked up an hour before close.

So here are my thoughts:
9 hours or less (current rates) X rate a week
10-11 hours X + $10 rate a week
11-12 hours X + $20 rate a week

This will be based on their schedule drop-off and pick-up time and I will make it very clear if they go over hours they will be charged extra and after so many weeks of going over hours you will automatically be put at the next tier of hours and pricing. Even if you only need 10-11 hours 1 day a week and 9 or less the other 4 you still must pay the 10-11 hour pricing. Any permanent changes in schedule increasing or decreasing hours will need two weeks written notice and adjustment period.

I was thinking about doing this for any new families and leaving my old families the way it is until Dec 1st when I go to change my license. At that point I will introduce this option where if they actually pick up on time they should stay at their current rate but if they are not like they have been it will be more expensive for them. So depending on how they prioritize their time they could stay at the same rate which I'm fine with as long as kids aren't here as long as they have been and if they are here for that long I need to be compensated better. That is my end goal!

Most people in my area commute so they will need the 10-11 hour option which will help me get more $$$$ in since I undersold myself a bit.

Does this make sense? Is it too complicated? Will it scare new parents away? Any other suggestions or improvements to my new idea? Any "loopholes" I should look out for?
Reply
Leigh 11:54 AM 02-20-2017
I'd make your minimum rate the rate that you need. If you're $30 less than the others in your area, add $30 to that minimum rate and go up from there. You'll be surprised at how many people are suddenly able to get their kids picked up early when they save money by doing it!
Reply
Sumshine 12:25 PM 02-20-2017
Originally Posted by Leigh:
I'd make your minimum rate the rate that you need. If you're $30 less than the others in your area, add $30 to that minimum rate and go up from there. You'll be surprised at how many people are suddenly able to get their kids picked up early when they save money by doing it!
Thanks for the advice!

I am hoping that people will pick up earlier to save some money so I can move on with my nights. It's hard when you have kiddos 5 mins to close! I purposely turned away families who said they wanted me until 6 I only accepted families who said that they would pick up by 5 or 5:30 at the latest just so I could forsure be officially be done at 6 every night! Also I made it very clear and have it in my contract that I wouldn't care for any kids more than 10 hours at a time but apparently that doesn't matter

I actually had 2 inquiries today (been a little dry on those this last month) and now I have 2 interviews set up this week for my last spot and gave them the new rates with the break down and they didn't seem concerned by the idea.

None of the providers in my area do it that way most just close earlier than I and charge based on if the kid is potty trained or not. Not many 6-6ers and now I see why!

I think it's a great option versus me just raising my rates in general. It will make people want to pick up on time and if you're only using me for 9 hours then great you get the best deal! It will allow me not to have ALL the kids almost 12 hours every day and if it ended up that way at least it'd be worth my while vs now.

I wish I could pitch it to my current parents but I'm in no position financially to lose anyone over it
Reply
Unregistered 12:47 PM 02-20-2017
I think you are still under selling yourself! I have done that for two years too until I realized that I couldn't keep up with the rest I needed or even the expenses.

In your position I would meet the other childcare in the area by adding $15 per week for the 10-11hours/day then $30 per week for 11-12hours/day.

And mention your extra activities a lot by adding pictures and example of your daily activities.

It gets tiring to be underpaid.
Reply
CityGarden 01:35 PM 02-20-2017
As a parent I think fees based on pick up time and not the actual number of hours in care seem the most straight forward.... as a provider I think it will make recording keeping / billing more straight forward as well. (i.e. different rates for pick up at 4pm, 5pm, 5:30pm, etc. regardless of what time they drop off)

BlackCat & Daycare both do this.... you can search contracted hours on this forum and lots will come up based on that.

I personally had some policies for my first family that I quickly realized I wanted to shift --- that 1st family has a different contract/handbook and hours/rate structure than any other family who enrolled after. I will honor my commitment to that 1st family but new families have the new policies (and rates/handbook to match) and I have an annual contract with families so when the contract is up for the 1st families they will either get on board with the new policies or they will have to opt to move to another program.
Reply
Sumshine 02:28 PM 02-20-2017
Originally Posted by CityGarden:
As a parent I think fees based on pick up time and not the actual number of hours in care seem the most straight forward.... as a provider I think it will make recording keeping / billing more straight forward as well. (i.e. different rates for pick up at 4pm, 5pm, 5:30pm, etc. regardless of what time they drop off)

BlackCat & Daycare both do this.... you can search contracted hours on this forum and lots will come up based on that.

I personally had some policies for my first family that I quickly realized I wanted to shift --- that 1st family has a different contract/handbook and hours/rate structure than any other family who enrolled after. I will honor my commitment to that 1st family but new families have the new policies (and rates/handbook to match) and I have an annual contract with families so when the contract is up for the 1st families they will either get on board with the new policies or they will have to opt to move to another program.
I like the idea too but never heard of it until this forum! Had I known before I started I think I would of done it this way to begin with lol!

It is straightforward and it basically holds parents accountable to actually come pick up and drop off with timeTHEY chose. I think that's the part that gets me the most is that they are the ones that chose this time yet that can't stick to it!

I agree that with the old families vs new families as well! I will stick to what I've commited to and after a year they can hop on or off
Reply
CityGarden 04:11 PM 02-20-2017
Originally Posted by Sumshine:
It is straightforward and it basically holds parents accountable to actually come pick up and drop off with timeTHEY chose. I think that's the part that gets me the most is that they are the ones that chose this time yet that can't stick to it!
I like that it is based on pick up time only.... when it is done both at drop off and pick up it seems less straightforward.
Reply
daycare 07:25 PM 02-20-2017
My program runs from 8am to 4 pm for the lowest rate.

Let's just pretend these are the rates.

8-4:00 $200
8-4:15-$215
8-4:30-$230
8-4:45-245
8-5:00-$300

Magically all my parents put clothes up at 4 or 4:15pm


If you need to arriv before 8am it's an additional $20 a week. I will only open at 7:30 the earliest.

Doesn't matter if your here at 7:55. It's before 8.

My parents are contracted, so I know when children are deopp d off and picked up.
Reply
Blackcat31 06:14 AM 02-21-2017
Originally Posted by Sumshine:
I like the idea too but never heard of it until this forum! Had I known before I started I think I would of done it this way to begin with lol!

It is straightforward and it basically holds parents accountable to actually come pick up and drop off with timeTHEY chose. I think that's the part that gets me the most is that they are the ones that chose this time yet that can't stick to it!

I agree that with the old families vs new families as well! I will stick to what I've commited to and after a year they can hop on or off
NOTHING wrong with updating your rate structures or policies after the fact.

I think it's actually a smart business move...

You set things up with the expectations that it would be X way but after being in business you have realized it works better to do Y. That is good business strategy if you really think about it....changing to meet your business needs (to stay profitable and open) and changing to meet the needs of your clients as they change all the time.

I've always told clients when I make policies about how I charge or accommodating summer or rotating schedules "if I can, I will but just because I have doesn't mean I always will" . That can apply to alot of things.

It also lets parent know that just because I let something slide one summer or gave them a break on something one time, doesn't mean I will always be able to do so.

Also want to mention that if any of your current families left because you restructured your rate to be more in line with what is current, that tells you they chose you based on your rate. IMHO, having a family that chose you based solely on rate isn't the type of family I want. They tend to me the hardest to placate when something doesn't work in their favor.

Don't get me wrong, fees and rates should definitely be a contributing factor in why families choose your program but it shouldn't be THE reason. (they enroll or leave)
Reply
daycare 06:43 AM 02-21-2017
Originally Posted by Blackcat31:
NOTHING wrong with updating your rate structures or policies after the fact.

I think it's actually a smart business move...

You set things up with the expectations that it would be X way but after being in business you have realized it works better to do Y. That is good business strategy if you really think about it....changing to meet your business needs (to stay profitable and open) and changing to meet the needs of your clients as they change all the time.

I've always told clients when I make policies about how I charge or accommodating summer or rotating schedules "if I can, I will but just because I have doesn't mean I always will" . That can apply to alot of things.

It also lets parent know that just because I let something slide one summer or gave them a break on something one time, doesn't mean I will always be able to do so.

Also want to mention that if any of your current families left because you restructured your rate to be more in line with what is current, that tells you they chose you based on your rate. IMHO, having a family that chose you based solely on rate isn't the type of family I want. They tend to me the hardest to placate when something doesn't work in their favor.

Don't get me wrong, fees and rates should definitely be a contributing factor in why families choose your program but it shouldn't be THE reason. (they enroll or leave)
BC is right.
I did a consultation with Nannyde and a months later changed to the tier like I showed.
I laid mine out at the start of summer and then raised rates on new families coming in.

Change is hard, we worry others won't like it.
Reply
Sumshine 06:52 AM 02-21-2017
Originally Posted by Blackcat31:
NOTHING wrong with updating your rate structures or policies after the fact.

I think it's actually a smart business move...

You set things up with the expectations that it would be X way but after being in business you have realized it works better to do Y. That is good business strategy if you really think about it....changing to meet your business needs (to stay profitable and open) and changing to meet the needs of your clients as they change all the time.

I've always told clients when I make policies about how I charge or accommodating summer or rotating schedules "if I can, I will but just because I have doesn't mean I always will" . That can apply to alot of things.

It also lets parent know that just because I let something slide one summer or gave them a break on something one time, doesn't mean I will always be able to do so.

Also want to mention that if any of your current families left because you restructured your rate to be more in line with what is current, that tells you they chose you based on your rate. IMHO, having a family that chose you based solely on rate isn't the type of family I want. They tend to me the hardest to placate when something doesn't work in their favor.

Don't get me wrong, fees and rates should definitely be a contributing factor in why families choose your program but it shouldn't be THE reason. (they enroll or leave)
Thanks BC! When I set out to do daycare I wanted to be a little bit cheaper than the others just to start off with for the first year but I didn't realize how much cheaper I was lol I was going off the 2015 averages I was given! I also have a couple of different methods that I don't mind using like I don't take any paid vacation (I know we deserve it but I work in the restaurant biz and am so used to taking things unpaid I'm okay with it) and I do 1/2 fee holidays! This forsure the parents realllllllly liked! My goal is to by the end have none of that matter because my rates will be where they need to be by the 1st year open.

I agree about rates and family choosing you solely on your rates! I just can't afford to push the buttons anymore than I already have with tons of small policies changes I nipped within the first 2 months of being open. When I first opened I had a lot of people inquire and want to set up interviews and basically I found out that they were just trying to jump ship to cheaper daycare from other in home providers and I never extended an offer for them because I didn't want them to jump ship with me if they found something cheaper or when I raised my rates.


I talked to someone who did daycare in the area a while ago and she said she'd be having big fines for going outside of the set hours. It may at some point get to that but I'm hoping that people are just wanting to save the $10-20 a week and show up on time and for commuters where it isn't possible then they just pay the higher rate and I feel better about the situation. Plus no one in my area does things this way because I'm realizing most open around 6:30/7 and close by 4:30/5 so no need to worry about kiddos being here for 11.5 hours a day because it just isnt an option except for the center's that are twice as much as I am. I like being available to take kiddos 6-6 it opens up more opportunities for clientele but I didn't present myself as a "leave all the kids here all day everyday and you can pick up an hour-two hours after you said you would because I don't "close" until 6pm". My policies, contracts, and my rate sheet state up to 10 hours a day. This is partially my fault for not putting my foot down but I didn't know what to do or how to go about it and felt it would just spiral again to this if I didn't find an over all solution. As I stated before I specifically chose families who would pick up at a time of 5:30 or earlier so it allowed room for traffic, weather, etc here or there and I'd be done by 6pm but not shopping, gas, and everything else until 5:59pm every day of the week.

I used to commute myself and I purposely picked daycare closer to my work so I could always be on time to get him and he wouldn't be there from open-close.

Again I think what confuses me the most is that they picked their times when they started with me. I don't see how times that THEY chose are an issue but apparently it is lol!
Reply
childcaremom 07:09 AM 02-21-2017
Originally Posted by Sumshine:
Thanks BC! When I set out to do daycare I wanted to be a little bit cheaper than the others just to start off with for the first year but I didn't realize how much cheaper I was lol I was going off the 2015 averages I was given! I also have a couple of different methods that I don't mind using like I don't take any paid vacation (I know we deserve it but I work in the restaurant biz and am so used to taking things unpaid I'm okay with it) and I do 1/2 fee holidays! This forsure the parents realllllllly liked! My goal is to by the end have none of that matter because my rates will be where they need to be by the 1st year open.

I agree about rates and family choosing you solely on your rates! I just can't afford to push the buttons anymore than I already have with tons of small policies changes I nipped within the first 2 months of being open. When I first opened I had a lot of people inquire and want to set up interviews and basically I found out that they were just trying to jump ship to cheaper daycare from other in home providers and I never extended an offer for them because I didn't want them to jump ship with me if they found something cheaper or when I raised my rates.


I talked to someone who did daycare in the area a while ago and she said she'd be having big fines for going outside of the set hours. It may at some point get to that but I'm hoping that people are just wanting to save the $10-20 a week and show up on time and for commuters where it isn't possible then they just pay the higher rate and I feel better about the situation. Plus no one in my area does things this way because I'm realizing most open around 6:30/7 and close by 4:30/5 so no need to worry about kiddos being here for 11.5 hours a day because it just isnt an option except for the center's that are twice as much as I am. I like being available to take kiddos 6-6 it opens up more opportunities for clientele but I didn't present myself as a "leave all the kids here all day everyday and you can pick up an hour-two hours after you said you would because I don't "close" until 6pm". My policies, contracts, and my rate sheet state up to 10 hours a day. This is partially my fault for not putting my foot down but I didn't know what to do or how to go about it and felt it would just spiral again to this if I didn't find an over all solution. As I stated before I specifically chose families who would pick up at a time of 5:30 or earlier so it allowed room for traffic, weather, etc here or there and I'd be done by 6pm but not shopping, gas, and everything else until 5:59pm every day of the week.

I used to commute myself and I purposely picked daycare closer to my work so I could always be on time to get him and he wouldn't be there from open-close.

Again I think what confuses me the most is that they picked their times when they started with me. I don't see how times that THEY chose are an issue but apparently it is lol!
Don't ever assume that dcps will have the same parenting values as you. I did a lot of tweaking of my policies the first year.

When I upped my rates, I gave one month's notice. I was really nervous to do it. Know what? No one batted an eye.

Make the changes you need to make. Families that value you will know you are worth it. Families that complain aren't the clients you want.
Reply
daycare 07:32 AM 02-21-2017
I used to think just like you. I always thought well if I would consider that as a parent, so will my clients.

yeah I was rudely awakened by the truth. lol that way of thinking was short lived.

I realized that if parents did think like the "MOST of us" then we wouldn't have all these rules and policies.
Reply
thrivingchildcarecom 10:11 AM 02-21-2017
Ahh! I remember those days! I think you are on the right track. I did something similar years back by limiting the care hours to 9 hours.

The only thing I can say is I would be a little leery letting the current clients abuse their contracted hours for so long. Might cause issues when you do change. Maybe send out a "reminder" note to current clients to stick to their contracted hours or face late fees. That usually will get them in line. Nobody likes added fees. LOL!
Reply
Sumshine 10:58 AM 02-21-2017
Thank you everyone! You guys always offer the most empowering advice!

I talk to a couple providers in my area but they are so laid-back I don't know how they can do it I guess I'm just too much of a control freak! I found one newer gal who just moved here and got licensed last week and she was previously licensed in a different state for two years prior to this and she has some of the similar opinions that I do so I'm glad I'm not the only "crazy structured" one who demands some form of expectations in my area now!
Reply
Leigh 11:31 AM 02-21-2017
Originally Posted by Sumshine:
Thanks BC! When I set out to do daycare I wanted to be a little bit cheaper than the others just to start off with for the first year but I didn't realize how much cheaper I was lol I was going off the 2015 averages I was given! I also have a couple of different methods that I don't mind using like I don't take any paid vacation (I know we deserve it but I work in the restaurant biz and am so used to taking things unpaid I'm okay with it) and I do 1/2 fee holidays! This forsure the parents realllllllly liked! My goal is to by the end have none of that matter because my rates will be where they need to be by the 1st year open.

I agree about rates and family choosing you solely on your rates! I just can't afford to push the buttons anymore than I already have with tons of small policies changes I nipped within the first 2 months of being open. When I first opened I had a lot of people inquire and want to set up interviews and basically I found out that they were just trying to jump ship to cheaper daycare from other in home providers and I never extended an offer for them because I didn't want them to jump ship with me if they found something cheaper or when I raised my rates.


I talked to someone who did daycare in the area a while ago and she said she'd be having big fines for going outside of the set hours. It may at some point get to that but I'm hoping that people are just wanting to save the $10-20 a week and show up on time and for commuters where it isn't possible then they just pay the higher rate and I feel better about the situation. Plus no one in my area does things this way because I'm realizing most open around 6:30/7 and close by 4:30/5 so no need to worry about kiddos being here for 11.5 hours a day because it just isnt an option except for the center's that are twice as much as I am. I like being available to take kiddos 6-6 it opens up more opportunities for clientele but I didn't present myself as a "leave all the kids here all day everyday and you can pick up an hour-two hours after you said you would because I don't "close" until 6pm". My policies, contracts, and my rate sheet state up to 10 hours a day. This is partially my fault for not putting my foot down but I didn't know what to do or how to go about it and felt it would just spiral again to this if I didn't find an over all solution. As I stated before I specifically chose families who would pick up at a time of 5:30 or earlier so it allowed room for traffic, weather, etc here or there and I'd be done by 6pm but not shopping, gas, and everything else until 5:59pm every day of the week.

I used to commute myself and I purposely picked daycare closer to my work so I could always be on time to get him and he wouldn't be there from open-close.

Again I think what confuses me the most is that they picked their times when they started with me. I don't see how times that THEY chose are an issue but apparently it is lol!
I think you're finding that people who choose their daycare based solely on rate are the people who won't value you or what you offer.

I suggest sitting down and figuring out what you NEED to make this business profitable. If your monthly expenses are $4000, for example (mortgage, utilities, groceries, car payment, insurance, medical bills, property, income, Social Security tax, etc), you know that is your break even point. Then you have to figure what you need for your "other" categories (clothing, entertainment, savings, gas, education expenses, kid's birthday parties-think of everything you spend). Take this and double it or even triple it. Think about whether you could afford to replace your furnace without notice or pay for a new refrigerator based on what you're charging now. Use these numbers to set your rate by figuring how much you need per space per year, and working from there on rate.

It's important to remember this is business, not social services or a charity. You ARE doing this to make a living and you and your family deserve to make a living. If I cut my rates by $30 as a "service" to my families, I would be essentially giving them $18,720 a year. Think about the big picture when you're thinking about rates. I've seen MANY providers lose their businesses because they wouldn't charge enough to live on or to buy their child's medicine because they didn't want to seem greedy.

I think that if you take your business and your right and need to make the same good living that other providers are seriously, that you'll find that you'll have more compliant clients and the price shopper/daycare jumpers will move on to the next "new girl" to take advantage of.
Reply
Sumshine 12:55 PM 02-21-2017
Originally Posted by Leigh:
I think you're finding that people who choose their daycare based solely on rate are the people who won't value you or what you offer.

I suggest sitting down and figuring out what you NEED to make this business profitable. If your monthly expenses are $4000, for example (mortgage, utilities, groceries, car payment, insurance, medical bills, property, income, Social Security tax, etc), you know that is your break even point. Then you have to figure what you need for your "other" categories (clothing, entertainment, savings, gas, education expenses, kid's birthday parties-think of everything you spend). Take this and double it or even triple it. Think about whether you could afford to replace your furnace without notice or pay for a new refrigerator based on what you're charging now. Use these numbers to set your rate by figuring how much you need per space per year, and working from there on rate.

It's important to remember this is business, not social services or a charity. You ARE doing this to make a living and you and your family deserve to make a living. If I cut my rates by $30 as a "service" to my families, I would be essentially giving them $18,720 a year. Think about the big picture when you're thinking about rates. I've seen MANY providers lose their businesses because they wouldn't charge enough to live on or to buy their child's medicine because they didn't want to seem greedy.

I think that if you take your business and your right and need to make the same good living that other providers are seriously, that you'll find that you'll have more compliant clients and the price shopper/daycare jumpers will move on to the next "new girl" to take advantage of.
You are definitely right! I set myself up to be a little lower to stay competitive and get people in the door my first year but I really went too low somehow I did not jump on the right band wagon lol!

I hadn one interview back down already but the other is still on with the new rates! We will see how it goes!
Reply
Mom2Two 03:31 PM 02-21-2017
OP I hear you. I am about to change my hours and maybe my rates and it's a lot to rethink it all.
Reply
Sumshine 04:14 PM 02-21-2017
Originally Posted by Mom2Two:
OP I hear you. I am about to change my hours and maybe my rates and it's a lot to rethink it all.
It is a lot but in the end I think it will make me a much happier provider. I can't run myself down too much and I like to be flexible where I can be but if you want to utilize me for more than 10 hours of the day I have to be paid more than what I am now to make it worth my while!
Reply
JessicaH 06:44 PM 02-22-2017
I have only been open since October and I found that I am definitely below the average for my area when it came to care (followed the 2015 rates). I was hoping that it would help me get in the door, but I really don't think it has mattered. I am now up to 5 kids, but would like to add a couple more. Will definitely up my rates for anyone new!

At least in my area this is an extremely difficult field to get into and I think I was trying a little to hard to be competitive.
Reply
Sumshine 05:11 AM 02-23-2017
Originally Posted by JessicaH:
I have only been open since October and I found that I am definitely below the average for my area when it came to care (followed the 2015 rates). I was hoping that it would help me get in the door, but I really don't think it has mattered. I am now up to 5 kids, but would like to add a couple more. Will definitely up my rates for anyone new!

At least in my area this is an extremely difficult field to get into and I think I was trying a little to hard to be competitive.

We have some REALLLLLLLY cheap daycares out here (mainly for SA care), some average, and some spendy!

One mom I interviewed said she's only paying $90 a week currently and everywhere was asking $150-160 when she was calling and came across me at $130 for the particular age she was looking for! I was like $90 a week?! How?! But she said the provider doesnt do pre k, potty training, etc all things she was searching for. In the end she ended up staying where she was, or at least that's what she told me, I was irritated I even offered to interview her after she told me in person she had been to EVERY in home provider in town with the opening! Lol such a waste of my time and I did it after hours too!

I have a lady around the corner who got licensed a week after me. Her daycare space is smaller, less inviting, not a dedicated space, less toys, she has no good sleeping arrangements (she messaged me asking how many kids can sleep on a couch ), no stroller, etc (not to be mean or cady!) She is forsure $20 a week more than I and she has the exact same amount of kids I do currently so I agree I don't think price makes a difference at all unless maybe you're too spendy it could turn people away but hey maybe you want only a certain clientele and pricing provides you that!
Reply
Tags:fees, rate structures, rates
Reply Up