Fri Oct 09 2020

6 Tips for increasing childcare tuition



If you are in the childcare business or any business, a time will probably arrive when you need to increase the cost of your service. As an owner or manager of a childcare center, if the expenses have begun to outweigh the income, it may be time for an increase.

However, it is not uncommon for this type of news to bring backlash and complaints, in this case, from the parents who are paying for your service. Nonetheless, this should not keep you from increasing the tuition rate if you genuinely feel it is time to do so. As a business manager, you have bills to pay, and, at the same time, you are looking to make a profit.

We have developed six tips that will help you increase the childcare tuition without receiving too much backlash (because there will always be some) and helping things run as smoothly as possible in your business.

  1. Prepare your service contract

An excellent way to be prepared for when you need to increase any rate related to the services you offer is by adding a section in your contract where you state that at any moment, your rates are subject to change. You can also add an estimated percent increase that can be expected and how the parents will be notified of this change.

By doing this in advance, you will be able to explain to your clients that part of the contract stated that your rates are subject to change and that it is part of your services, billing, and payment policies.

2. Communication is key

First of all, follow through by doing exactly what you said you would do in your contract. Then, communicate promptly with the parents. Send them an email and also a written letter explaining the increase, the reasons for the increase, and since when it will enter into force.

However, you should also take the time to introduce your program and present the service's terms every time a new child enrolls in your childcare facility. In this meeting, you can explain the value of the service you provide and what is needed to sustain a high-quality level. This is also the perfect moment for you to notify the parent how often you usually increase the tuition rates, which will help them understand when this eventually occurs.

3. Timing is everything

Be considerate when you raise the tuition rates. You can do it once a year or every two years, but the time of the year is also essential to take into consideration. Right after the holiday or tax season is perhaps not the best time to do so.

Depending on where in the world your childcare center is located, you can determine when is the best time of the year to increase the rates without receiving too many complaints. The ideal time to announce a raise in the tuition fees is right at the beginning of the school year when you open registration or before the previous school year ends.

However, there can be times when it is impossible to avoid rasing tuition fees in the middle of the school year. If you really do have to proceed, give plenty of notice between the time of the announcement and the time when the new fee takes effect. Our recommendation is no less than 30 days in advance.

4. Do reasonable increases

When you raise your fees, be sure that you cover all of your expenses and have enough for an emergency fund. But, try to keep the increase within 2-5% of what the parents are currently paying.

5. Be transparent at all times

This final tip is vital because the way you handle things will impact how they are perceived by the parents. It may be easier to digest the increase in rates if you offer some explanation as to why it is taking place. This can occur in an email, letter, or a schoolwide newsletter.

The parents will feel more comfortable in knowing where their money is going. For instance, if you are planning on buying new furniture or remodeling a playroom, you can explain this in your letter and how these actions will improve the quality of the child's care that they receive at your childcare center.

6. Keep your prices competitive

Be sure to keep your prices competitive, even with your tuition raise. If, after calculating your raise, you feel that your prices are no longer competitive, perhaps you need to reduce certain costs or eliminate what you don't need.

A good practice is to do surveys and ask parents how they feel about your service, what they believe could improve, and their opinions. Market surveys are also other great tools so that you can have a notion of what the competition is doing and why they have the rates that they have.

childcare center

Sample letter for notifying parents of the childcare fee increase

Here is a sample letter (or email) you can use whenever you need to notify your clients that you are increasing the fees of your childcare center.

Dear Parents,

We hope you are all doing well. As you already know, a new school year will begin on _________. As stated on our service policy handed to you when you registered your child, we increase the rates in our center every year.

On this occasion, we are planning to (insert reasons for increasing the fees here), and for these reasons, the rates will be increasing to $_______ a week beginning on _______.

With this change, we will continue to deliver the best quality program for your children, considering their education as our first priority.

If you should have any questions about this notice, please see _____________.

Thanks for Choosing (Your facility Name)!

Your Name

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