Have you ever lowered rates?

[Crazy8]

In the past 13 years I have raised rates a few times - not every year, sometimes 5 years between raising them, sometimes 2 years in a row. I rarely raise for current clients, usually just raise them for new people coming in. Last time I raised rates was 2013.

Well, I think I've gotten to a point where my rates are too high for what I offer. I have shortened my hours over the years, and economy isn't exactly booming right now for daycares in my area. I am in an area with a high percentage of SAHM's too. Daycares and preschools that used to be filled always have plenty of openings now, I always have openings now.

So, thinking its time to lower rates. Has anyone ever had to do this? Did it help your business? I am thinking of only going down about $1-2/day from my current rates. Not sure if that's enough to make a difference??

[cheerfuldom]

yes I have lowered rates. I did this a year ago by $10 a week but I had also shortened my hours by one hour a day. Same thing here with lots of small places and SAHMs taking kids so there is generally lots to choose from except for infant care, and I only take one infant at a time. So anyway, yes it did help. It was worth it to me to get all my spots filled. I make more money by lowering rates and getting all spots filled.

[Crazy8]

yes I have lowered rates. I did this a year ago by $10 a week but I had also shortened my hours by one hour a day. Same thing here with lots of small places and SAHMs taking kids so there is generally lots to choose from except for infant care, and I only take one infant at a time. So anyway, yes it did help. It was worth it to me to get all my spots filled. I make more money by lowering rates and getting all spots filled.

that's exactly the same for me, trying to keep with a 4:30 closing time (will go to 5 if I have to) and only take 1 infant at a time!

[Lurker]

I've been a long time reader, but always felt weird to post. It seems like most of the posters on here are always terminating or charging fees for things that are free in my neck of the woods. It just feels while I always struggle to get the number I need to stay a float, so many people on here are just throwing away clients for any little toe that's out of line the first time it happens. Sorry you're having a hard time, but it is nice to see I'm not alone.

[Dilley Beans]

Maybe offer something you didn't before, increase the value. Like give parents 1 week of vacation they don't have to pay for, or 2-3 unpaid sick days. Maybe offer organic milk or invest in a new piece of play equipment, or take some continuing education courses you think might make you a better provider like a course on working with kids with disabilities, sign language, etc.

I'm more in favor of increasing your value than reducing prices.

[Blackcat31]

Maybe offer something you didn't before, increase the value. Like give parents 1 week of vacation they don't have to pay for, or 2-3 unpaid sick days. Maybe offer organic milk or invest in a new piece of play equipment, or take some continuing education courses you think might make you a better provider like a course on working with kids with disabilities, sign language, etc.

I'm more in favor of increasing your value than reducing prices.

This is good advice

I never did a cost of living raise every year....because I believed that if I did, I would someday find myself in the position you are in..so instead I raised my rates for things such as weird or hard to manage/accommodate hours and/or needs instead of an overall increase for everyone.

I have always stayed competitive to what our state's assistance program paid out since we were always told that the rate our state pays out is consistent with the median income per area.

Right now, my fees are about 20% more than what the state pays. (but the 20% more is because of our star rating system)
I have not had a problem getting or keeping clients as I've focused more on raising quality from year to year and evaluating what the current needs are for my community.

Some years, there are so many 2-4 yr olds needing care that a daycare could open on every block and still not have enough daycares available. Other years are lean and there seems to be a vacancy in every daycare there is here.

Currently, I receive 4-5 calls per week looking for care for kids under age 2. Right now, there are so many kids under 2 on waitlists that I think some of the care providers in my area won't even take anymore names on a waitlist.

I recently went through our state's star rating program and have used that to my advantage as far as advertising and building a good client base.

I've made many program changes that I think are much more effective in attracting and keeping clients verses simply lowing rates.