Raising Rates

[janell999]

How do you go about informing your daycare families that you need to raise your rates? I have a feeling i'm underpaid for my area compared with other daycare centers. I just recently added a new full time child which put us in a new bracket for liability insurance. so our insurance went up and I think i need to rethink my rates. I haven't raised rates for 3 years and all of my daycare families are people that work at my husbands job so I know them and i'm friends with them. They have had the same rates for 3 years and I feel bad changing them, but then again, I need to be fair to myself as well. So how do you all inform your families of the rate changes? is there a template somewhere that doesn't sound too formal?

[Michael]

Here are some threads on Rate Increase Letters: https://www.daycare.com/forum/tags.p...ncrease+letter

[DaveA]

I have it in my contract fees are evaluated each November. If I raise them they take effect January 1. I send out a letter the end of the month stating if I'm raising rates or not. If I am raising rates I attach a contract addendum stating the new rates and effective date.

[Leigh]

How do you go about informing your daycare families that you need to raise your rates? I have a feeling i'm underpaid for my area compared with other daycare centers. I just recently added a new full time child which put us in a new bracket for liability insurance. so our insurance went up and I think i need to rethink my rates. I haven't raised rates for 3 years and all of my daycare families are people that work at my husbands job so I know them and i'm friends with them. They have had the same rates for 3 years and I feel bad changing them, but then again, I need to be fair to myself as well. So how do you all inform your families of the rate changes? is there a template somewhere that doesn't sound too formal?

Did any of your clients get raises in the last 3 years? I'm sure they did. Why would they deserve a raise, and why would you NOT deserve one? I'd not only raise your rates to at least your area's average rate (I'm above my local average), but I would plan on a yearly increase, as well.

[Blackcat31]

If your clients are "friends" they should want you to be paid well. You can't buy that kind of security with strangers.

Also, feeling bad is okay but it doesn't mean it should alter your business model. Allowing your feelings to influence how you operate (financially) is the quickest way to run your business out of business.

[janell999]

good point

If your clients are "friends" they should want you to be paid well. You can't buy that kind of security with strangers.

Also, feeling bad is okay but it doesn't mean it should alter your business model. Allowing your feelings to influence how you operate (financially) is the quickest way to run your business out of business.

[Meeko]

I raise my rates every year. But only for incoming parents. I have a "same rate for life" deal with my clients. As long as payment is always on time, enrollment is current and they follow policies etc...their rate will never increase.

They get one warning. If they mess up again...they go straight to the current rate.

I may be losing some money, but I love having stable, long time good clients who know they have it good and don't want to screw up. That means more to me than the cash.

[AmyKidsCo]

I have in my policies that rates will go up each year. Then every fall I edit my policies and send them out with the new rates. I usually send them out a month ahead of time.

[BrightBeginnings2014]

I raise my rates every year. But only for incoming parents. I have a "same rate for life" deal with my clients. As long as payment is always on time, enrollment is current and they follow policies etc...their rate will never increase.

They get one warning. If they mess up again...they go straight to the current rate.

I may be losing some money, but I love having stable, long time good clients who know they have it good and don't want to screw up. That means more to me than the cash.

Love this!! I was just thinking about doing the same and wondering how to go about that!