I recently got this question…how and when should I raise my tuition rates? It is a best practice in the child care industry to raise rates annually. It’s a mindset shift, that you should get comfortable with. Child care owners are often nervous that families and parents will leave if rates increase. This usually is NOT the case, if you implement it right and do it well.
Most of our Child Care Success Academy members are doing such a fantastic job with their programs that parents are pleased and happy, they will not simply move their children solely due to a rate increase.
If you want a step by step process on how to raise your rates without push back from parents, Check out my video here:
The 3 big things to consider are:
Timing ~ Increase your rates annually during the re-enrollment time of year – around the August/ September period. I would recommend not to implement an increase after the holidays or right around the 1st of the year. Pocketbooks are feeling a bit of a pinch. If you haven’t had an increase in over 18 months, go ahead and get one going in the next few months. It will become a part of your annual planning process.
How It’s Communicated~ Mail home an actual letter. Don’t rely on communication being stuffed into a child’s cubby! We all know that these can end up at the bottom of a backpack where parents won’t likely see it. Follow-up with an e-mail referencing the initial letter. Remember to give some notice that this is coming down the pike. Give parents at least a 30 day heads-up that this increase will take place. Explain the “why” of the increase. Highlight the programs, the materials and improvements that may be happening around the school over the next few months. Maybe you have just added new playground equipment, or special meals at your school. This goes hand in hand with what your “unique differences”. Explain what the increase will be supporting. This will give the parents something tangible to attach to the increase.
How Much~ Where will you stand in your marketplace with your rates? If this is an annual rate increase look to a cost of living increase, somewhere between 2-5%. Communicate your value and your rate will speak for itself.