How to Raise Your Home Daycare Rates During a Recession

Being a home daycare provider can have its rewards and its challenges. Unfortunately, when tough economic times hit, the challenges can start to outgrow the rewards. You'll need to have a heads up about what could be coming your way, what's already happened to you and how to deal with it.

Your Daycare Rates

When the cost of living increases, your wages have to equally increase or you'll actually be taking a pay cut. This is because your dollar can't go as far today as it did yesterday. Typically, inflation is around 4% per year. This means that you need to raise the rates for your services by at least 4% each year to earn what you did last year. The problem, however, is that you're afraid that parents will complain if you raise your rates. After all, they do have a good argument. They're experiencing the same hard times that you are.

Unfortunately, this reason is not sufficient to justify a salary ceiling for yourself. Don't be afraid to raise your rates. Notify parents in writing that in order for you to be able to keep up with the rising costs of doing business and living, you're raising your rates. If you're worried that they'll leave, don't be. Good childcare is hard to find. If you've been doing a good job and their kids are well adjusted with you, they would be foolish to pull their kids out because you asked for another dollar per day. In fact, depending on where you live, that might just be enough to cover some of your higher expenses. If you're caring for four children and you raise your rates by $1, per child, per day, that's about $80 extra per month in total for you.

Face it. Some parents will complain if raise your rates no matter what the economic climate. That's just how people are so don't take it personally. Invite them to look at it from another perspective. They can brew their morning coffee at home instead of buying one every day. Or they could skip that soda and candy bar at the vending machine during break time that they probably don't need anyway. That's a small sacrifice to make to ensure quality care for their kids.

You're in business and when tough times come, business people have to make tough decisions or they fail. If your family is depending on your income then the issue of raising your rates becomes a very simple one. Is your priority your family or your daycare families?