Other Providers in My Area Doing Daycare Sooo Cheap!!!

[Mydaycare]

I am new to my area and I have notice other providers advertising on cl for sooo cheap like $70 for full time mon-fri up to 12 hrs :confused: other $80 but the worse one is $100 PER FAMILY not per child I received many phone calls and emails but no interviews at all. I'm doing $100 per week per child I don't think I'm being expensive what do you think any advice?

[MarinaVanessa]

Here's something that I put together for my local child care association which pretty much sums up my thoughts about low child care rates:

A piece from "Establishig Your Rates"

Don’t Undercut Yourself

A strategy that I am seeing more and more of lately
is offering child care at extremely low rates. It is
understandable if you must boost enrollment and
have the view of “some income is better than no
income” however this strategy comes with some
concerns.

"Lowering your rates to an extreme may possibly get
you new clients but keep in mind that it could also
push other clients away. Families looking for high
quality child care may see extremely low prices and
automatically think “low-quality”.

Lowering your prices in an effort to boost your
enrollment may also push other child care providers
around you to lower their prices even lower in an
effort to stay competitive. Ultimately the child care
rates may fall lower and lower which is great for
families but not so great for child care providers
that can’t afford to go that low or that have a hard
time making ends meet because their rates are so low."

The problem with offering child care at a deep discount is that even though you may attract some clients I'd be afraid that I'd be attracting the "bottom of the barrel" type. I'd want clients that understand and appreciate what I do for them and their child. From the parents persepective I'd be wondering why a child care provider's rates have to be so low in order to attract clients and I'd be wary of them.

[spud912]

It depends on how much you need the income. If you can hold out a bit longer, I say charge what you charge. If you drop it to compete, you may end up with the wrong type of clients. $100 is low enough for your area! Plus I know your daycare has a nice set-up and good program and I cannot say the same for your competition!

If you absolutely need the income, then offer a special, such as $25 off your weekly child care if you sign up by x and x date, to be used after 4 weeks of full-time care.

[Willow]

I had the same trouble in my area once I moved. I couldn't believe how low some function at.


*IF* you can swing it consider jumping on the competitive bandwagon -but- raising your rates annually once you get better established. Once the community sees you're worth it you should have no trouble building off the referrals you're bound to attract. The ones you want will be willing to pay more if what you have to offer is loads better.

[SunshineMama]

I agree with Marina. I charge a little more but I always offer an explanation as to what "extras" my services cover. Once they see my home an hear about my program they are hooked. My trouble was getting them to my home- I now do not discuss rates except in person

[Countrygal]

One way I got around this, especially at the beginning was to accept public assistance. To do that I had to become certified. Big pain, BUT it did bring in my first two clients which got me through that "rough patch". I also took part-time just to get started. In three months I had two part time and one full time and the first two part-timers on the assistance were gone. Now all three have come full time and I'm full! Once word starts getting around about your program, you'll get some clients!

[Heidi]

I would also try to avoid advertising rates or giving them out over the phone.
Tell the prospective clients something like "my rates are pretty close to the norm around her, but I only give them out in person".

Then, once they've met your awesome self and have seen your super-cool set up, they will see why you charge what you do. If they've been to any of the "bottom of the barrel rate" providers, they will see the difference!

[Mommy2One]

I would also try to avoid advertising rates or giving them out over the phone.
Tell the prospective clients something like "my rates are pretty close to the norm around her, but I only give them out in person".

Then, once they've met your awesome self and have seen your super-cool set up, they will see why you charge what you do. If they've been to any of the "bottom of the barrel rate" providers, they will see the difference!

As a parent, I wouldn't appreciate this kind of tactic. I would feel like I was being played games with and I would hate to waste my time (and the potential providers) with an interview only to learn that her rates were outside our budget. I've seen full-time rates for a 3 year old as low as $75/week for recently established home care and as high as $200/week for preschool-style centers so my "norm for the area" and the provider's could be very different.

Unless I was very impressed from our emails/calls/recommendations I probably wouldn't schedule an interview with someone who refused to give me a ballpark estimate (or answer other reasonable questions).

A compromise may be to give a rate range with a note that it depends on age, number of hours, needs of the child, etc. so parents know whether you're close to the same page.

[ritah]

As a parent, I wouldn't appreciate this kind of tactic. I would feel like I was being played games with and I would hate to waste my time (and the potential providers) with an interview only to learn that her rates were outside our budget. I've seen full-time rates for a 3 year old as low as $75/week for recently established home care and as high as $200/week for preschool-style centers so my "norm for the area" and the provider's could be very different.

Unless I was very impressed from our emails/calls/recommendations I probably wouldn't schedule an interview with someone who refused to give me a ballpark estimate (or answer other reasonable questions).

A compromise may be to give a rate range with a note that it depends on age, number of hours, needs of the child, etc. so parents know whether you're close to the same page.

I agree with this.

[Mom&Provider]

I wonder if any of these places that are sooo low are planning to give a price increase after a short period of time?

Maybe you could advertise your rate, although higher, saying no increase for a min. of 365 days or more if you could?! I'd imagine that would also get attention too!

[Country Kids]

As a parent, I wouldn't appreciate this kind of tactic. I would feel like I was being played games with and I would hate to waste my time (and the potential providers) with an interview only to learn that her rates were outside our budget. I've seen full-time rates for a 3 year old as low as $75/week for recently established home care and as high as $200/week for preschool-style centers so my "norm for the area" and the provider's could be very different.

Unless I was very impressed from our emails/calls/recommendations I probably wouldn't schedule an interview with someone who refused to give me a ballpark estimate (or answer other reasonable questions).

A compromise may be to give a rate range with a note that it depends on age, number of hours, needs of the child, etc. so parents know whether you're close to the same page.

See I can't give a "ballpark estimate" because I charge hourly. What gets me though is when parents get that first childcare bill or the first bill where there is no holidays/long month and then question me why their bill is so high. Well this is the number of hours your child was here x my rate and you get the total. Believe you me, not many take advantage of me because of this. THey drop off and pick up pretty quick after work.

My rate is under $3.00 an hour also.

[MarinaVanessa]

As a parent, I wouldn't appreciate this kind of tactic. I would feel like I was being played games with and I would hate to waste my time (and the potential providers) with an interview only to learn that her rates were outside our budget.

For this reason I don't mind giving out my rates over the phone. Not only do I not want to waste a parent's time if they can't afford my rates but I also don't want to waste my own time either. I feel that rates are a major factor in whether or not a parent choosing a certain DC or not and so for me it's important to give this information out right away, location is another huge deciding factor.

Interviewing takes a lot of time both in preperation and during the actual interview process so if I can weed people out to only those that really are interested and that can afford my rates then the better for me it is. I give my prices over the phone and even go as far as to have them posted on my website. I am not interested in a family that needs to negotiate the price with me, I want them to understand my price and either take it or leave it. I personally wouldn't schedule an interview if the parent wasn't clear on what the rate was. But that's the beauty of this business, there's so many ways to do it and everyone should find what works for them.

[countrymom]

I too give my rates over the phone, I would rather find out over the phone that they couldn't afford me, rather than during the interview. It happens here too. People low ball the true daycares. We have kijjiji here, I can't believe how many charge 20 dollars for a 10 hour day, who does this. Or the ad that said she was going to watch children for free because she loves children.

[My3cents]

Cheap doesn't stay around long.

That is my experience-

Don't worry to much what other providers are charging, set your rates to what you feel is fair and allows you to do what you do.

Daycares come and go all the time---