11 Years & I've Never Raised My Rates!

[KatieG]

I know I should've been doing this all along, but I've never raised my rates in the 11 years I've been in business. It's definitely time, but I'm not sure what is a reasonable increase? I googled "inflation rates" and found this:

http://www.usinflationcalculator.com/

It says that the cumulative rate of inflation from 2003 to 2014 is 29.3%!!! Obviously I'm not going to hit my families with a nearly 30% increase, but I don't know what is reasonable. I've done some poking around, and other providers in my area are charging 20-25% more than I am, so I don't know that they'd be totally shocked. Advice please?

[EntropyControlSpecialist]

Can I ask what is your rate, in dollars, and what is the range of rates of other in-home providers AND centers in your area?

[KatieG]

I charge $100/week/child for full-time. I don't have any part-timers. I am currently watching a 2yo boy, 13 month old girl, and 12 month old boy.

From what I see on Craigslist, other in-home providers are advertising $25-$30/day.

I checked with Kindercare here, it's $206-215/week for a 2yo, and $229-$232/week for a 12 month old.

A local church also has a daycare, they charge $180/week up to 12 months, $170/week 12 months - 3 years.

[EntropyControlSpecialist]

Then a MIN. I would be charging, if I were you, is $125/week. You are worth it.

[KatieG]

How much notice should I give them? If I let them know today that I'm increasing as of November 3rd, that's enough time, right?

[melilley]

Rates are about the same around here. We have a Kindercare here and rates are similar, maybe a little higher.
Legal in home providers here charge $100-$175 from what I've found. I used to charge $130 and have had no problems getting families. I just recently raised my rates to $140 and have implemented that rate with 2 new families and am going to raise the rates for current families to match new families, in January. I get calls all the time at the $140 rate.

I agree with EntropyControlSpecialist, the minimum I would charge is $125, but I be you could charge more!

[melilley]

How much notice should I give them? If I let them know today that I'm increasing as of November 3rd, that's enough time, right?

That sounds like more than enough time. I have it in my policies that I will give a two week notice to any changes (as long as they aren't related to licensing) so your notice sounds like more than enough time!

[KatieG]

I'm going to give them a letter at pick-up today. How does this sound:

Dear (Families),

I have been a Child Care Provider since June 2003. In the almost 11 ½ years that I’ve been in business I have never increased my rates, even though the cost of nearly everything else has risen significantly.

Beginning Monday, November 3, 2014, my weekly rate for full-time care will increase to $125 per week per child.

Thank you for understanding this necessary change.

Sincerely,
(Me)

[KIDZRMYBIZ]

The rate range is huge, and it all depends on what is offered. The last time I checked about 7 years ago, around here, centers are around $200/wk for infants, and around $160 for older children. In-home is anywhere from $85-$160/wk, depending on age, area, and how much is being offered (licensed, nutrition program, preschool, etc.). I offer all of it under the sun, and charge $135 for babies, and $115 for older kids.

I would suggest for you to increase now by $15 per week. That is not a lot of money, but will add up nice for you. Two-weeks notice is plenty. Just a short note of the change is all that is necessary. Your DCFs know the freaking awesome deal they've been getting, and won't be surprised. Then, I would up it again in January to where you want it, with a chart that compares your rates and what you offer with everyone else. With 2-weeks notice again. You don't want to give them too much time to shop around.

When I did my rate increase, that's what I did. It took some sleuthing, but it was worth it, and no one could argue that they were still getting the best deal around.

[KIDZRMYBIZ]

JMO:

I don't think the DCFs would care if your rates haven't changed in 11 years. They weren't there then, and all they care about is how much THEY have to pay NOW.

I think a chart comparing yourself to others in your area shows them they are still getting a good deal.

And then showcase anything new for the business so they can see how their child is directly benefitting from the extra pay.

[NeedaVaca]

I would do the rate increase for the full amount, I would find it odd as a parent to get a rate increase in Nov and again 2 months later. I like your letter and not raising your rates in 11+ years shows the families that you don't do increases very often.

[KatieG]

KIDZRMYBIZ, that's sort of what I thought too...a sudden 25% increase would be shocking, but 15% is probably doable. I know I'm *worth* more, but I don't want to send them packing, or maybe worse, stay and resent me. KWIM?

I would suggest for you to increase now by $15 per week. That is not a lot of money, but will add up nice for you. Two-weeks notice is plenty. Just a short note of the change is all that is necessary. Your DCFs know the freaking awesome deal they've been getting, and won't be surprised. Then, I would up it again in January to where you want it...

[TwinKristi]

They should be thankful their childcare prices are reasonable. I charge twice what you do for FT infants! But I live in a very high COL area.

[cheerfuldom]

Increase. if the parents dont like it, replace them. you cant work at $100 a week forever. if they stay and give you attitude, interview a replacement and then term. anyway you slice it, you win, more income for the same amount of work. I wold do another increase in 6 months.

[EntropyControlSpecialist]

Increase. if the parents dont like it, replace them. you cant work at $100 a week forever. if they stay and give you attitude, interview a replacement and then term. anyway you slice it, you win, more income for the same amount of work. I wold do another increase in 6 months.

Absolutely. happyface