As the standard cost of living is rising each year, so is the cost of everything else. Things like food, fuel, clothing, toys, and even utilities have experienced a significant increase just in the last three to four years.
So it should not come as a surprise that daycare prices will also need to rise to accommodate this.
While this change is a necessary one, it may still not be easy for the parents of your daycare to accept.
Thankfully, I am here to help! I want to teach you how to increase your daycare prices, while still keeping those parents happy.
(Early) Honesty is the Best Policy
As with anything else in life, it is important to be honest. When you are honest with the parents, they will learn (and continue) to trust you and respect your business.
In terms of your daycare pricing, it is a good rule of thumb to increase your rates between 3% – 5% each school year, at the beginning of the school year. This rate increase will set you up for success by allowing you to provide the best care for your daycare children.
Now back to being honest…
You’ll want to ensure that you are always honest with the parents as to what your rates are for the school year. It is best to do this as early as possible, preferably during the orientation process for the current school year.
The last thing you want is to slap on an increased tuition rate and blindside the parents, right? So how do you increase your daycare prices without blindsiding them?
The absolute best way to avoid blindsiding is to give them adequate notice that your rates will be increasing. For example, at Themba Creative Learning Center, I always give the parents a 30-day notice, in writing.
Explaining Value to Justify Rates
While providing the parents with adequate notice for rate increases is considerate, it is not enough. Let’s say that again…notice is important, but it’s simply not enough on its own.
With your written notice of rate increases, you will also want to provide them with the reasons as to why your rates will need to increase in the first place.
You will want to ensure that you are placing the value on your services and not just the rates.
Your parents will most likely understand the rate increases. When your business costs are increasing (things like your rent, utilities, food, school supplies, etc.), they will understand that you have to be able to offset those costs somehow. However, you still want to be courteous in explaining the value they are getting when sending their children to your daycare center.
Remember this…
Your rates should reflect the quality of care you provide.
For example, if you hire additional staff to care for your daycare children, that requires an additional cost on your end. Likewise, if you increase the quantity or quality of your school supplies, that is another additional expense you will incur.
How do you use those examples to prove the value of your daycare to the parents?
When you hire additional staff… The child-to-provider ratio changes, allowing for more one-on-one time for their child.
When you increase the quantity or quality of your school supplies… Their child is gaining access to a better educational experience and more opportunities to expand their knowledge.
Understanding & Explaining Your Value
You’ll want to talk about the points of value that your particular childcare center will provide to their children.
What makes your childcare center special or unique? What additional services or resources are you making available to their children that will warrant them paying an increased rate for the services or resources they already love?
Highlight the strengths of your business so the parents remain happy. When they are happy, the rate increases will not matter!
If you’re interested in joining a community where you can converse with me and other childcare owners, join my Facebook group Conversations with Childcare Owners!