Cost Increase

[jumping j]

Hi I was considering raising my prices, I have been working for 6 months and feel that I have a good understanding of how much running my business is costing me and how much I need to make in order to cover costs.
I was just wondering how people inform parents of increases and when they do it.
Do I have to wait until my contract review or can I do it at any time?

[uf353432]

I do a fee increase letter annually. I inform them in Jan and its effective from April which gives them adequate time to amend their childcare if they feel I am too expensive. Nobody has yet - but that doesn't mean they wouldn't.

[Zoomie]

I don't feel I could raise my fees until mindee had been with me for a year.

Also, you have to consider what is the market rate, as opposed to the rate you need to make your business profitable because if your rate is in excess of the market rate for your area, then you may find your parents moving.

My contracts say 4 weeks notice (for termination or other major change) so that is the very least amount of notice you need to give.

Finally, your start up costs will make your first year and possible your 2nd year less profitable.

[JCrakers]

I increased mine after 3 years....Should have done it sooner actually.
I wrote a letter and told them verbally what the letter said. This was in Feb and it stated that prices would increase 1st April

Everyone was fine about it. I only lost one family whose little boy attended while she did the housework for 5 hrs once a week

[uf353432]

It is a good point about checking the market around you. I am lucky because I work quite closely with a large range of childminders and we all discuss fee increases and look to increase at the same time so that across the area we are about the same. It keeps us all on an even playing field.

I am currently lagging behind the going rate in my area by about 20p a hour because I wasn't prepared to increase my hourly rate by 40p an hour to bring it into line. Any parents I took on this year were automatically taken on at the higher rate per hour - but some of my parents are getting it at a lower rate. When I do my fee increase this year I will put them all on the higher rate and so the older customers will see a 20 per hour increase and the others will remain the same.

I invest very heavily in good qaulity resources and my setting - I still regard my service as excellant value. In 3 years I have never increased my food fee's even though we know it has increased significantly. I think when you consider putting up your fee's you have to be confident that you are worth what you are asking for and offer great value for money - because childcare is a big bill for parents and for some a fee increase can really pinch where it hurts.

[AliceK]

I have raised my prices for all new children but for 2 families that have been with me for 2 years I haven't at all. It does mean that I have mindees who are all on different rates but I just feel that with things as tight as they are for everyone at the moment it could just be the straw that breaks the camels back so to speak. I know lots of people are losing their jobs etc so I just feel that at the moment I am lucky to have parents with jobs so I don't feel I can raise my prices at the present time. Maybe I'm too soft :blush:

xxx