For Those Of You Who Have Raised Rates

[Zoe]

what is an appropriate amount to raise?

DCG has been with me for 2 years. I started them at $20 a day when I first started with them as they were my first DCF starting out in this town. She comes 3 days a week and the three days have alternated month to month so she's really taking up a full-time spot at this rate. My regular rate now that I'm licensed is $25 a day, which is the average for our county and is very standard here. I have 4 other families at this current rate.

Well, I just received a two-week notice from this family that DCG is going to spend the summer with her 15 year old sister taking care of her. Oh joy. DCG gets very spoiled by her family and I've spent the last 2 years "training" her to follow the rules and be a great part of a group. I just know a summer of being at home is going to undo everything.

So anyway, if they intend to return her to me in the fall, to make it worth it to me, I'd like to raise their rates upon her return. Obviously, going straight up to my current rate is a bit steep. What do you think is an appropriate amount?

TIA!

[Blackcat31]

No matter how many days a week she uses, if she has access to the whole week then she needs to be paying for a full time space.

If you are interested in seeing how I handle this, PM me your e-mail address I will send you my rate sheet showing you how I charge families like this.

[Zoe]

I'll PM you my email address. My spots are filling up fast right now and I will also be giving them a letter stating that if they really want to guarantee that I have a spot for DCG in the fall, they will need to put down a non-refundable deposit. This new rate increase will be for SET days. Something tells me all the notices will put them off and possibly make me lose them, but I'm sorry. If you choose to keep your child home that's fine, but don't expect me to wait by the phone to see if you're ever coming back. Losing out on money the whole time.

[cheerfuldom]

I would raise up to the current rate now....otherwise you will be holding a spot for the summer for a family that may leave anyway. Be prepared to replace with a full time paying family. Add up all the money you will be losing on this family by continuing to cut them a huge discount and that should help you make the decision.

[littlemissmuffet]

I don't offer part-time rates. A part-timer pays full-time rates, regarless of schedule.

I also don't offer unpaid or discounted rates for a holding a space over summer/holidays/mat leave/etc. Parents will pay the full price because they know I will fill the spot when they are away. I only offer a discounted rate for holding a space (up to one month) for families that haven't yet started in my daycare @ $15/day.

I used to increase fees for newer families signing on while leaving older clients at their original rate... I won't do this any more. Every January I raise my rates for everyone ($20-$60/month). All of my families pay the same monthly rate no matter what, which sure simplifies my life.

[MarinaVanessa]

Personally I wouldn't hold the spot for them. I would ask them to choose to either continue to bring DCG like they regularly do and continue to pay the weekly rate (including the newly raised rate) or they can cancel their contract and I would begin to try to fill all openings that I have and they can check back 2-4 weeks before they needed childcare again and if I had a spot then they could come back, if not and I was full ... sorry.

Take all personal feeling out and think about it only from a proffesional view. Them leaving for the summer is better for THEM but it's not smart for you. You will lose money whether they leave a deposit to hold the spot or not because unless you can find a child that only needs summer care you'll lose income for that spot.

If you decide to still allow them to take the summer off I'd require at least half of the weekly rate until they come back as a holding fee paid up front (non-refundable).

As for raising their rates I think that raising them by about $5 a week ($1 a day if they are there 5 days a week) or $2 a day if they are there PT is ok and then next year you can raise their rate again by the same amount until they are caught up to your regular rate. If they leave for the sumer I would raise it all at once now if you can fill the spot quickly with another interested person should they balk at your raised rate and decide they don't want to pay. Remember, it's business ... not personal. KUP

[wdmmom]

I raised my rates across the board last October.

I raised by about 3% which was equivalent to around $1.00 per day, $5 a week $20 a month. Most of my families pay monthly so I broke it down to show the math that it was about 10-15 cents per hour. When you break it down and show them the little amount, the big amount per week/month doesn't seem so bad.

If you've never before raised rates on this family, I would tell them you will be raising rates over the course of several months.

For example: If they are paying $100 a week and you want to bring them up to the $125 a week, raise rates to $112.50 weekly starting June 1 and come January 1, 2012, they will need to pay $125 a week.

[MarinaVanessa]

Every January I raise my rates for everyone ($20-$60/month). All of my families pay the same monthly rate no matter what, which sure simplifies my life.

I raise my rates yearly too. I have noticed that rates in my area go up by about $5 a week every 5 years or so, so I just raise my rates by $1 a week every year. Takes the shock factor out of raising my rates even though it's the same thing as raising my rates by $5 a week every 5 years .

[Zoe]

Personally I wouldn't hold the spot for them. I would ask them to choose to either continue to bring DCG like they regularly do and continue to pay the weekly rate (including the newly raised rate) or they can cancel their contract and I would begin to try to fill all openings that I have and they can check back 2-4 weeks before they needed childcare again and if I had a spot then they could come back, if not and I was full ... sorry.

Take all personal feeling out and think about it only from a proffesional view. Them leaving for the summer is better for THEM but it's not smart for you. You will lose money whether they leave a deposit to hold the spot or not because unless you can find a child that only needs summer care you'll lose income for that spot.

If you decide to still allow them to take the summer off I'd require at least half of the weekly rate until they come back as a holding fee paid up front (non-refundable).

As for raising their rates I think that raising them by about $5 a week ($1 a day if they are there 5 days a week) or $2 a day if they are there PT is ok and then next year you can raise their rate again by the same amount until they are caught up to your regular rate. If they leave for the sumer I would raise it all at once now if you can fill the spot quickly with another interested person should they balk at your raised rate and decide they don't want to pay. Remember, it's business ... not personal. KUP

I have an interview tomorrow for a 7 yo dcg who needs only summer care. If it works out, I will have made up for (and then some) losing dcg over the summer. So here's crossing my fingers on that one!

I do like raising the rates slowly. I am making sure that even though I'm a little bitter about losing dcg after 2 years of great care, that I keep my emotions out of how I handle this situation in front of the parents.

[CheekyChick]

I would absolutely charge her $25.00 per day. Actually, I might even charge her for five days since she is basically taking up a full week spot - even if she doesn't attend every day.

Be bold and ask for what you deserve.

[MarinaVanessa]

I have an interview tomorrow for a 7 yo dcg who needs only summer care. If it works out, I will have made up for (and then some) losing dcg over the summer. So here's crossing my fingers on that one!

I do like raising the rates slowly. I am making sure that even though I'm a little bitter about losing dcg after 2 years of great care, that I keep my emotions out of how I handle this situation in front of the parents.

This is great. I hope it does work out for you! In that case then my suggestion to you is to have them sign a new contract/adendum that says that they agree that they will be allowed a break and state the dates they will be gone, their last day of childcare before their break and then the the date that they will be returning to make sure that there is no confusing later. Your summer client of course will have their own contract with their first and last day of childcare. Good luck, hopefully it's a perfect fit!!

[jokalima]

Ok so I read a lot of raising only 5.00 a week. Is it wrong for me to raise 15.00?

In my contract I have that I can raise the fees no more than 15.00 a week and that is what i want to do. When I went to my country to see my grandma I called so many providers to ask them if they could take my kids while I was gone, almost all of them said their price was 200.00, 180.00 and 175.00 I charge 140 and 145.00 so I was like , what? When the lady from the state came to do the yearly visit she asked me how much i was charging, when i told her she said I was charging to little. Anyways, what I've notice is that what i am charging is not enough to cover everything and 5.00 a week wont help much, so I am thinking on going up the 15.oo a week and even with that I am charging less than most providers in my area. Feedback please?

[momma2girls]

Ok so I read a lot of raising only 5.00 a week. Is it wrong for me to raise 15.00?

In my contract I have that I can raise the fees no more than 15.00 a week and that is what i want to do. When I went to my country to see my grandma I called so many providers to ask them if they could take my kids while I was gone, almost all of them said their price was 200.00, 180.00 and 175.00 I charge 140 and 145.00 so I was like , what? When the lady from the state came to do the yearly visit she asked me how much i was charging, when i told her she said I was charging to little. Anyways, what I've notice is that what i am charging is not enough to cover everything and 5.00 a week wont help much, so I am thinking on going up the 15.oo a week and even with that I am charging less than most providers in my area. Feedback please?

When I moved into this area 5 yrs. ago, I raised my rates $15.00 per week. I haven't raised mine at all since. I did however lower my sibling rate.

[MarinaVanessa]

Ok so I read a lot of raising only 5.00 a week. Is it wrong for me to raise 15.00?

In my contract I have that I can raise the fees no more than 15.00 a week and that is what i want to do. When I went to my country to see my grandma I called so many providers to ask them if they could take my kids while I was gone, almost all of them said their price was 200.00, 180.00 and 175.00 I charge 140 and 145.00 so I was like , what? When the lady from the state came to do the yearly visit she asked me how much i was charging, when i told her she said I was charging to little. Anyways, what I've notice is that what i am charging is not enough to cover everything and 5.00 a week wont help much, so I am thinking on going up the 15.oo a week and even with that I am charging less than most providers in my area. Feedback please?

If you have openings I would try to fill those at the higher rate ($15 more) first before I'd try to raise the rates by $15 a week to your current clients. If they fill up quickly chances are that you'll be able to find more clients that will spots should your currents choose to go elsewhere since they are used to paying that rate. They may look around and try to find childcare with the same rate they pay now or lower than your new rate.

From my experience and from talking to other providers I have found that raising the rates by anything more than $5 a week all at one time usually has some sort of a shock factor that clients don't respond well to. You can try it and if your current clients don't want to pay it or freak out you can continue to charge your current clients your current rate until you can find replacements that will pay the higher rate.

[renodeb]

I usually raise rates by 5 dollars a week. (which breaks down to 1 dollar a day raise) I know its not much but it does make a bit of a diffrence and I have never had a parent complain. I usually raise there rates around the new year each year with a month's notice. You are wise to do reasonable raises, after all you dont want anyone making waves.
I have always been under the national average for dc rates. If a 15 dollar raise is normal for your area then go for it. I just know that my clients would freak if I raised my rates that much.
Debbie