Anyone Increasing Their Rates For 2018???

[Ms.Koech]

Hi,

This is my first time posting, although Im not new to this forum. Im so thankful to have a community to go to for help/questions. So this is my dilemma. Ive been open for less than a year now. But now realize how low my rates are compared to other home centers that offer all that i do. I currently charge $120/week for ages 2+ for 9.5 hours. my rate includes all meals,we do daily activities, preschool curriculum,crafts, sign language, spanish, and field trips to museums etc. I want to also incorporate yoga once a week with an instructor. I am in the raleigh, NC area,and Im thinking of raising my rate to $140. I have 2 new kids that are paying this rate and the mom said this was even a low rate. My question is how would I go about increasing my older clients. they've all told me during their interviews that my rate was low. But i dont want to just hit them with an $80/month increase. any suggestions how I should go about? i know i give exceptional care, my kids cry when its time to go home. families are all happy and most of all the kids are learning and very happy. I just feel like im working so hard and barely able to make a profit with all we do.Thanks in advance to all!

[daycarediva]

Gradual increases, say $5/week quarterly until currently enrolled families hit your going rate.

[Ms.Koech]

Gradual increases, say $5/week quarterly until currently enrolled families hit your going rate.

I think this may be the less painful way for my parents. Thank you!happyface

[Josiegirl]

When I found out I was charging at least $20 less a week than everybody else locally, I gave my dcfs a month's notice that rates would be increasing $5 a week every 6 months. And I'm still not up to others' rates, so I like the idea of quarterly much better. All new enrollments are charged the higher rate coming in.
THEN I found out a local center, which happens to own 2 big centers in our small community, charge $200 a week. That's a huge difference from what all the in-home providers are charging. I think we're getting the short end of the deal.

[HappyEverAfter]

I didn’t increase rates this year but they will go up next year. When I opened this past year, I researched rates in the area and placed myself at the top right off the bat. I went $5 week cheaper than one other person but about $20 higher a week than the average. It was risky since I was just starting out but I knew how much I would feel comfortable charging for the amount of work I was committing to. I haven’t had a single issue with parents feeling my rates are too high. I even have one DCG whose mom took a second part time job in order to afford to bring her daughter to me because she felt so good about the environment I was providing.

I plan to raise rates annually in January each year starting next year. Most likely by 3%-5%.

If you want to raise your rates now, I’d do it a little at a time so that it’s gradual but make parents aware of when to expect the increases.

[CityGarden]

I have only been open a year as well. I built into my contract a 5% tuition increase each year effective in September.

Here are three relevant blog post from Tom Copeland on increasing rates:

http://tomcopelandblog.com/how-to-talk-to-parents-about-raising-your-rates-2

http://tomcopelandblog.com/easiest-way-raise-rates

http://tomcopelandblog.com/how-to-raise-your-rates-2

[CityGarden]

I successfully restructured my hours and tuition after my first child was enrolled. First the new policies were rolled out to all new families and eventually notice was given to that initial family.

One thing to be clear on is what is the goal with the change.... my end goal was to shorten my day with the changes, it sounds like your goal is to increase income so always keep that in mind. I bring this up for two reasons 1) I always knew when I opened I wanted a short day but my policies did not match that - they maximized my income with the potential of a shorter day but did not guarantee the short day I desired and 2) because on one hand you state you want $20 more per week per spot but then you also say you want to add a yoga class with an instructor. Having the instructor would increase your overhead so you need to factor that when adjusting your prices to ensure you bring home what you need/want.

A couple different options to increase rates from those already enrolled:

- Add an activity fee. Sell them on new/upgraded services (preschool curric., music class, yoga, etc.). Tell them the additional fee is X per week and is due regardless of attendance. Really play up the new service(s) and get their buy in. (When I first opened I had a monthly music class fee.... it was required and not one parent questioned this.)

- In my opinion in terms of increasing income the best option is to switch to contracted hours based on pick up times for all families! When I first opened I offered contracted hours based on pick up times, the first family enrolled needed my max hours so I did not get the short day I desired but I did make a lot more money for my time. With the contracted hours I made $10 more per day than the highest provider in my area for my max hours. BlackCat & DayCare both offer contracted hours based on pick up times so look at their post especially for examples.

I use contracted hours and can no longer wrap my head around why some providers do not. !::

However, I usually introduce new families to new payment/rate policies but wanted all my families on contracted hours so I could have better control in when I work and when I am off work. I own a separate child care house so I certainly didn't want to be at work any earlier or longer than I really needed to be...kwim?

I wrote a letter telling parents that rather than raise rates across the board, I was instead implementing a rate structure that would allow the parent to control their child care costs. Basically, I "sold" it to them something that benefited THEM.

Now I know EXACTLY when I need to be here and when I can leave. Thus allowing me to schedule appointments and other personal things outside of work verses having to find a substitute or having to close.

I now make MORE money and work LESS hours.
People will find a way to do X if it will save them money.
If they just pay by the day, then they want their money's worth and won't waste using it.
I think it's the secret to "marketing" and sales really......

Full disclosure I opted to do away with contracted hours for myself since I quickly realized I did not want to offer a full day program regardless of the additional money.

[Ms.Koech]

When I found out I was charging at least $20 less a week than everybody else locally, I gave my dcfs a month's notice that rates would be increasing $5 a week every 6 months. And I'm still not up to others' rates, so I like the idea of quarterly much better. All new enrollments are charged the higher rate coming in.
THEN I found out a local center, which happens to own 2 big centers in our small community, charge $200 a week. That's a huge difference from what all the in-home providers are charging. I think we're getting the short end of the deal.

Same with me, Im about $20-$30 lower than others nearby and I offer much more than them. Lesson learned I know I sold myself short now . Im going to do the $5 increments every quarter. Thanks for responding!

[Ms.Koech]

I didn’t increase rates this year but they will go up next year. When I opened this past year, I researched rates in the area and placed myself at the top right off the bat. I went $5 week cheaper than one other person but about $20 higher a week than the average. It was risky since I was just starting out but I knew how much I would feel comfortable charging for the amount of work I was committing to. I haven’t had a single issue with parents feeling my rates are too high. I even have one DCG whose mom took a second part time job in order to afford to bring her daughter to me because she felt so good about the environment I was providing.

I plan to raise rates annually in January each year starting next year. Most likely by 3%-5%.

If you want to raise your rates now, I’d do it a little at a time so that it’s gradual but make parents aware of when to expect the increases.

Thank you so much for responding! Im sending out increase letters friday!

[Ms.Koech]

I successfully restructured my hours and tuition after my first child was enrolled. First the new policies were rolled out to all new families and eventually notice was given to that initial family.

One thing to be clear on is what is the goal with the change.... my end goal was to shorten my day with the changes, it sounds like your goal is to increase income so always keep that in mind. I bring this up for two reasons 1) I always knew when I opened I wanted a short day but my policies did not match that - they maximized my income with the potential of a shorter day but did not guarantee the short day I desired and 2) because on one hand you state you want $20 more per week per spot but then you also say you want to add a yoga class with an instructor. Having the instructor would increase your overhead so you need to factor that when adjusting your prices to ensure you bring home what you need/want.

A couple different options to increase rates from those already enrolled:

- Add an activity fee. Sell them on new/upgraded services (preschool curric., music class, yoga, etc.). Tell them the additional fee is X per week and is due regardless of attendance. Really play up the new service(s) and get their buy in. (When I first opened I had a monthly music class fee.... it was required and not one parent questioned this.)

- In my opinion in terms of increasing income the best option is to switch to contracted hours based on pick up times for all families! When I first opened I offered contracted hours based on pick up times, the first family enrolled needed my max hours so I did not get the short day I desired but I did make a lot more money for my time. With the contracted hours I made $10 more per day than the highest provider in my area for my max hours. BlackCat & DayCare both offer contracted hours based on pick up times so look at their post especially for examples.



Full disclosure I opted to do away with contracted hours for myself since I quickly realized I did not want to offer a full day program regardless of the additional money.

Thank you so much! I am liking the idea of charging by pick up times.

[Blackcat31]

Thank you so much! I am liking the idea of charging by pick up times.

Charging according to pick up time eliminates that resentful feeling when you have one kid there later than everyone else feeling. Now if that one kid is here later than the others, I am being compensated well for it so it's something I can rectify in my head much easier.

I also don't have parents complain about their rates either.
If they want to save money, pick up earlier.
Win-win for everyone! happyface

Like my previous post said, I work less hours now but make more money.

[storybookending]

I am not sure that contracted hours would ever work in my case. Most jobs around here are 8-5 or 8-4:30 (depending on alloted lunch break) salary type jobs. There is a fairly large clinic/hospital with hospital hour like shifts that differ from the norm (6AM-3PM) but I am unwilling to open earlier than 7AM. The clinic has its own daycare where at least one parent must be employed there and their rates are based on what the parents salary is. I used to sit for a family of two doctors. They were/are paying $285 a week for their daughters spot while her medical assistants child is in the same class paying over $100 less a week. My hours are not bad now. I advertise 7:00-5:30 but I rarely work “open to close”.

[Blackcat31]

I am not sure that contracted hours would ever work in my case. Most jobs around here are 8-5 or 8-4:30 (depending on alloted lunch break) salary type jobs. There is a fairly large clinic/hospital with hospital hour like shifts that differ from the norm (6AM-3PM) but I am unwilling to open earlier than 7AM. The clinic has its own daycare where at least one parent must be employed there and their rates are based on what the parents salary is. I used to sit for a family of two doctors. They were/are paying $285 a week for their daughters spot while her medical assistants child is in the same class paying over $100 less a week. My hours are not bad now. I advertise 7:00-5:30 but I rarely work “open to close”.

Same here (as far a job types and hours etc) but it's amazing how quickly a daycare family can get assistance from a friend or family member if it means they save money.

I had a family that used services from open to close. Parents struggled with listing a back up person for alternate care if needed... said they literally knew no one in town and had no family or other relatives near by.

I changed my rate structure. The new rate scale made it so they would be paying an additional $50 per week.

Suddenly mom had neighbors and friends coming out of the woodwork wanting to help out and pick up the child earlier than mom or dad were able.

I don't spend a single second worrying about job hours, availability of family, friends or neighbors when I set my rates. I worry only about being compensated for the later pick ups and it's truly enlightening to see that family's that couldn't manage previously manage great now!

Add money into the situation and parents suddenly "think" differently. ::

[Annalee]

Same here (as far a job types and hours etc) but it's amazing how quickly a daycare family can get assistance from a friend or family member if it means they save money.

I had a family that used services from open to close. Parents struggled with listing a back up person for alternate care if needed... said they literally knew no one in town and had no family or other relatives near by.

I changed my rate structure. The new rate scale made it so they would be paying an additional $50 per week.

Suddenly mom had neighbors and friends coming out of the woodwork wanting to help out and pick up the child earlier than mom or dad were able.

I don't spend a single second worrying about job hours, availability of family, friends or neighbors when I set my rates. I worry only about being compensated for the later pick ups and it's truly enlightening to see that family's that couldn't manage previously manage great now!

Add money into the situation and parents suddenly "think" differently. ::

When a client truly wants your services, they will do what it takes to make it work!

[CityGarden]

Charging according to pick up time eliminates that resentful feeling when you have one kid there later than everyone else feeling. Now if that one kid is here later than the others, I am being compensated well for it so it's something I can rectify in my head much easier.

I also don't have parents complain about their rates either.
If they want to save money, pick up earlier.
Win-win for everyone! happyface

Like my previous post said, I work less hours now but make more money.

I was trying to find your post that listed the pick up times and sample rates but could not. I really like how easy your contracted rates were broken down.