Rate Increase

[LannieJ]

Hello everyone,

I've been in business for 6 yrs and have only raised my rates once (2 yrs ago). My prices are competitive, but there's always someone who complains they're too high, while others can't believe they're getting such an awesome deal! The prices for goods and services have gone up, so I'm considering a rate increase. However, I'm wondering if it's too soon. Of all the families in care, only 1 was not here when the first increase was implemented.

What do you think? How often do you raise your rates?

Thanks in advance for your help!!

[Unregistered]

I raise my rates every two years. I don't think it is too soon to raise your own. One thing I do when I raise rates is to give a full two month of notice. That way if anyone has a problem with the increase, they have time to find other care rather than pay the increase. (Of course, they never do though. Most parents will just pay the new rate, because chances are they are happy with your care and would rather pay the new rate than find new care.)
Good luck! I always feel a little uncomfortable myself whenever I raise my rates. But it is just something we have to do as business owners. No one is ever going to offer to pay us more: so if we want more money we have to raise our rates ourselves.

[sahm1225]

I raised my rates once & now just charge a higher rate for new families enrolling.

What I did was add two more paid holiday this year and figured that was my increase

When I did raise my rates, I lost one family but to be honest they should've left a long time before that!

[Lucy]

I always charge more when someone new comes in. The older families do get raised, but never actually reach the amount that newer ones are paying.

I have two families that started about a year apart. Kids are same ages and attend same days/times. First one has been here 10 yrs, the other one 9. They've never paid the same amount, just because when the 2nd one came, she was charged a higher rate than the 1st one. And any new that have come and gone since then have been higher yet.

To answer your question though, regarding your existing families -- it's definitely not too soon to raise them again!!! I'd probably raise approximately 5%.

[Crazy8]

I raised my rates for new families as they enrolled but rarely raised rates of current families. Since you say your rates are currently competitive then I would maybe hold off on raising them for current families. If you are filling spots give out the new rates, that will sometimes help give you good feedback on whether you new rates are going a little too high. But in general raising them after 2 years is not too bad, I just preferred not to do that with my families.

[Rachel]

I am lucky in that I work for a fixed rate the government sets, and so far (3rd year doing this), it has gone up every year (but not always in September even though that's when we open). It seems to go up anywhere between 3 & 10 dollars a child per month, and the rate the parents pay doesn't always go up (the state just kicks in more). I like having a monthly rate because besides the fact that I get paid every more in advance, it makes rate increases seem like not such a big deal and not nickel and diming people.

[LannieJ]

Losing daycare kids to school

wrong area, will post elsewhere

[AmyKidsCo]

I have a cost of living raise to my rates every year.

[TaylorTots]

I raise mine 5-10% every two years.

[DaveA]

In my policies I tell parents that fees will be evaluated each November to change starting Jan 1. I don't change them often (only twice in 8 years, this year probably will be time #3), but this way parents know its possibly coming.