When/How Often Do You Raise Your Rates?

[ecemom]

I was just wondering when and how often you raise your rates? How much notice do you give? Do you use a flat fee increase or a %? Also, how to do inform your clients? Do they have to sign a new agreement or an addendum?


THANKS!!

[Chickenhauler]

Being that the rates are stated in the contract, you would have to have them sign a new contract.

The reasonable (and possibly legally required thing) would be to give them at least as much notice as your contract states is required for either party for termination of services. I think two weeks is sufficient notice for a rate increase.

I think anything more than an annual review of revenue compared against expenses would be viewed as excessive, unless there is some circumstance beyond your control that is running up your expenses rapidly and astronomically (heating fuel quadruples in price overnight for example).

As for informing them, do it verbally, be polite, but firm in explaining it, along with giving them written notice, and make a note of date and time when you gave them this notice.

I know that sounds "anal", but we've all been down the "I was never told" excuse road.

[tymaboy]

I have not raised mine since 2007. There will be new rates come 2010.

[laundryduchess@yahoo.com]

I do not raise my rates all at once, I add when I get a new family,... once a family starts with me they dont get their rates changed. I simply raise the new families when I feel I deserve it and it filters through. Noone ever gets a rate raise and noone ever gets upset. But I do get raises.

[melissa ann]

I started doing childcare in March 2008. I did have a half day rate, but my families said they would need full-day. However, after a couple months, everyone started half day. So in the fall, I eliminated half day. Had they stated from the beginning they wanted half day, I woulnd't have taken both families. However, after that the kids were back to full day.
Now, this past Aug. my rates went up by $1/day. With the prices of everything going up(food, heating oil, and our electric rate caps are coming off shortyly) I had to raise them. I had no problems with that. I still have the families. Most days the kids are here the entire time I'm open. 11 hours and I get $18/day.
Why should I not raise my rates (raise)? My dcp get raises once/year.
I think that it's fair to evaluate your expenses yearly, and if need be, raise your rates. I think that $5/week increase is acceptable per child.

[mac60]

I totally agree Melissa. I just lost a dc boy that I have had for 6 years, he started school in another district. I had him 6 years, and never raised his rate. So stupid of me, as mom bragged every year she got a 4% wage increase at the hospital. He started at $15 per day and ended 6 years later at $15 per day. I know, supid of me. This is a typical trap that I have gotten myself into. Not keeping my rates up with the cost of expenses going up.

Typically, if I have a family that has a new baby, I will adjust my rates accordingly then. But for those who only ever have 1 child in my care for 2 to 6 years, I do not have anything in place to raise rates, and I definately need to change that.

My expenses over the past 2 years have went up considerably. And I have not raised rates on anyone.

[ecemom]

$18 a day? WOW. I'm almost double that and I am still within the going rate for my area. A little on the higher end b/c I have a ECE bachelors and many years of experience as a teacher/administrator/director.

I calculated out that a 3% raise is just over $4 a week and 4 % is $5.40/ week. I don't want to get into dealing with change, so I was thinking of doing a dollar a day increase- so it is an even $5 a week per child. I was thinking of doing this at the beginning of the new year (obviously, I would tell the parents way ahead of time).

I guess my concern is that I have one family that just started with me in August. My contracts had no dates for renewal on them, which I never thought of before. I would like to update the contract with a few things I need to add in (including a renewal date) and wasn't sure if it is too early to put in a rate increase for that family? They are on a school schedule, so I could always put in my new contract that rate increases will be done in September or August when they return, but I think it is only fair to do all families at once. Would you wait and just do the increase in September or would you do it at the beginning of the year?

[tinytotzdaycare]

childcare rates

My kiddos rates decrease as they get older. I only allow full-time, you can come part-time but you must pay the full time rate. I have 2 moms that choose this b/c they love it here! In December EVERY year I pick a random week to give them FREE childcare! This helps them with the holiday crunch and I feel good knowing I was being generous!! =) The fun thing is they never know when its going to happen, I just announce it on a Friday that the week was FREE! They love it!

[melissa ann]

ecemom, isn't it "weird" how daycare rates can vary? I'm in a little town and I've seen people advertise for $12-15/day. The avg I would say is about $90/week. My sister is in Az and charges $23/day. I have a cousin in Md and she pays $40/day.

I think it's unreasonable for parents to think that if their child is at the same daycare for numerous years, not to expect a rate increase. As long as the increase isn't outrageous, I would hope the dcp would be understanding about it.

[tinytotzdaycare]

rates

Im in Marion IA and I charge $100 a week fulltime and then it goes down after they start school like I stated before, crazy how regions change the amounts so much

[Chickenhauler]

Daycare rates are largely dependant upon the local economy and wages-if you set your rates too high, nobody will bring their child, as it will eat their entire paycheck.

When we lived in OR, our daycare was double what the going rate is in MN, but so were the wages, housing, gas, taxes, etc, so it was all about equal in the end.

I believe the term is "Economies of Scale".

[Unregistered]

I raise my rates every September. I have a family that started with me in June and I chose not to raise their rates until next September, but everyone else is paying the new rate. They will all be on the same rate next year when they go up again.
Our rates around here (western WA) are pretty high compared to some areas of the country. I charge $40 per day.

[Former Teacher]

My former center would raise the rates about every 3 years. This last time was in Oct. 2008. Rates went up $10.00 per week across the board. This broke down to:

0-3 years 125.00 per week
3 and up 115.00 per week
Afterschool 75.00 per week (this would change to the preschool rate during holidays and vacations)

Drop ins were:

0-3 years $55.00 a day
3 and up $45.00 a day

We use to have an hourly rate however we discontinued that since everyone would just use the daily rate. Drop ins were also cash only and must be paid before drop off - no exceptions.

[Unregistered]

In Seattle, we charge $300 week for full-time care. There are many places more expensive but this covers the expenses

[momma2girls]

Im in Marion IA and I charge $100 a week fulltime and then it goes down after they start school like I stated before, crazy how regions change the amounts so much

WOW!! You are cheap!!! I don't live that far from you, and I charge $130 for totally potty trained and $140.00 for infants. I have a large waiting list for infants!!!