How You Can Raise Your Childcare Rates
Childcare services are indeed a blessing in disguise for those of us that regularly spend long work hours away from home and are unable to spend enough time with our little ones. That said, childcare providers have countless issues of their own such as striking a positive balance between cash inflows and resource expenses and ensuring that they are able to provide high-quality services to their clients.
If you are a childcare provider that is struggling with your business, here are a few important questions you might want to ask yourself.
- Are your charging your clients enough for covering the tuition expenses at your childcare?
- Do you feel you need to increase your childcare rates?
- Are you afraid of losing out on your clientele if you ask for a raise?
Well, if your answers to these question are in affirmative, you might want to rethink your business strategy and actually revise your childcare rates to cover the shortfall.
Determine your hourly wages
While it might be a little unnerving to actually make up your mind and ask the parents to pay more, it is extremely critical to ensure that you are able to cover for your business costs without having to absorb the additional expenses out of your own pocket. With the prices skyrocketing with each passing year, you would need to ensure that your customer rates are aligned with the costs of your everyday supplies and services at your daycare. A good way to start is by determining as to how much you actually make in an hour. The math is simple. You just need to break down your weekly tuition charges to a daily rate and divide the figure by the number of hours you put in at your daycare.
Decide on a suitable time to ask for a raise
While the actual time that you wish to break the news of a rate increase to your clients is largely up to you, it is highly recommended that you plan for it well in advance. As such, it is a great idea to ask for an annual increase at the beginning of a new financial year since it will help the parents chalk out their yearly costs in advance and they are less likely to be caught off-guard. Also, you must avoid the end of the year as this is the time when most families are struggling with their own budgets with the extravagant holiday spending.
Breaking the news
One of the most dreaded aspects of increasing your childcare rates is actually intimating the clients of the same. While you might not be comfortable with the idea of breaking the news to the parents at first, it is actually going to be worth it. There are several ways in which you can notify your clients of the rate increase without creating a panic situation for them. For starters, if you wish to adopt the annual rate increase approach, it is a good idea to add a specific clause in your contract that duly notifies the parents of the same. By letting your clients know in advance that your childcare rates would keep getting revised every year, you can actually put the parents at ease and avoid any last minute negotiations.
Deciding on the rise
Another big question is how much raise you should actually ask your clients for. Well, the answer is simple. You just need to analyze the strategies of other businesses of determining their rate hikes and just follow suit. For instance, if you wish to go for the annual rate increase option, you might want to specify a percentage hike on the lines of say 2-5% standard raise on your contract.
While asking for a childcare raise might not be the most alluring of prospects, it is a useful strategy for keeping up with your business costs and maintaining the quality of your services.