Monday, February 20, 2012

Varied Rates Or Flat Rate?

Many child care providers charge varied rates for different age groups.  An example is:

0-12 months -- $150 per week
12 months until potty trained -- $125 per week
potty trained until school age -- $100 per week
Sibling Discount -- $10 per week

The problem with a home provider charging this way is that a home provider is limited in her business because the state determines how large a home child care business can be.  In many states, a small home child care is limited to 4 to 6 children and states can also dictate how many infants, toddlers, and preschoolers a person can care for. This means, most providers can only take one or two infants at a time, one or two toddlers and the rest must be preschool age.  There is no opportunity to "sell" more spots to grow your business, therefore a provider should get full price for all spots.  Even if a provider expands to a group home, that provider will have an employee or two with taxes and insurance costs and still the state limits the amount of children that can be cared for.

Some child care providers point out that caring for an infant is more work than caring for a preschooler.  I disagree with this.  Every age has its own challenges.  An infant is more physical work, but a preschooler requires more mental work with planning and executing activities, answering the constant stream of questions, refereeing arguments, discipline strategies, etc.  Preschoolers cost more to care for; more food, activity supplies, field trips, etc.

I have always charged a flat fee for many reasons.  The two major reasons are that I like that all parents are paying the same rate and I didn't want to argue with a parent over if their child is technically potty trained or not (or whatever the milestone was that would bring their child care price down).

Consider not offering discounts for siblings or milestones.  How much is each spot in your child care worth?  Charge that amount to all parents.



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