One of the first questions I ask providers during a business training session is when was the last time that you raised your child care fees? More often than not, providers will either say that they have never raised their rates, or it has been several years since they last raised them. It is not only OK to raise your rates, but also strongly recommended.
In Tom Copeland’s book, Contracts & Policies, he discusses why and how providers should raise their rates. He points out that parents and others usually receive pay raises or cost of living increases. Child care providers deserve the same. You are a business and part of the workforce. Additionally, your expenses have and will continue to rise. This has been very evident over the last few years. Food, utilities, rent/mortgage have increased for everyone, including for you! Moreover, employees are looking for pay increases. The best practice to try to keep up with these increases is to pass along some of the costs to your families.
Child care providers are often fearful of approaching this subject, However, if it is done regularly and the increases are reasonable, most families will understand why you are utilizing this business practice. Annual rate increases are recommended. Tying this increase to the annual renewal of your contracts is the simplest way to do this. Copeland states, “…put a clause in your contract that says you will raise your rates annually, even if the raise is very small.” Having this yearly discussion with your families will build your business relationship with them.
Finally, we understand that this is a difficult discussion for both you and your families. However, it is necessary in order for you to continue to provide quality child care for your families. If you are unable to meet your business expenses, you will not be able to keep your doors open and this will result in the loss of income for you and the loss of quality care for the children.
The Child Care Council of Dutchess and Putnam is here to assist you with building your strong, sustainable child care business. We provide training, technical assistance, and resources for child care programs. Please contact Kathleen Murphy, Director of Business Services, at 845-473-4141 ext. 224 or kmurphy@childcaredutchess.org for assistance and information.
