How to increase fees

[goldie81]

Hi, been childminding for just over 5years and not increased my fees. Need to, but how would you word this in a letter???

Not very helpful at this stage, but in general I would rather pay a small annual increase in line with inflation, rather than have a five year 'jump' all in one go.

Not saying your going to do an increase of that magnitude this time round, but it's something to bear in mind for the future.

Do you charge significantly less than your competitors in the area? I would write a very simple letter, simply saying that charges will go up by x-amount to new-rate on such-and-such a date. Do give notice of the increase.

Yes I know in hind sight I would have put them up annually but too late for that now, but I will def be looking at doing so in the future.
Rates vary from what i charge £4.50 hr to £5.50 an hr. Was thinking if I write letter now then put increase in place as of jan - what do you think?

I am sending out my January increase in the next few days.

As others have said, just keep it matter of fact. From x date my fees will be £n.

I only did one hike in five years, from 4 to 4.20.i just added it as a line at the bottom of my email invoice : please be advised that from 1st January my fees will be increasing to £4.20 an hour.

Everyone was fine, except my sister who went batshit at me, despite loudly celebrating a 3k payrise shortly before....

Yes just give out a matter of fact notice. I would say as from January also, as then goes enough Time for people to opt out if really don't like it ( although most around you have no doubt gone up also too)

Important Notice:

Due to a large increase in daily expenses and resources, as from January 8th 2014 the hourly fees at xyz childcare will be increased to £5.50 per hr.

Signed x

A pound an hour is quite an increase, or is that just the variation in rates around you?

thats a 20% increase -well over 20% - which is a lot, yes you havnt put fees up for 5 years and tbh £5.50ph isnt a lot,but if a parents used you every day 10hrs a day, thats an increase of £50 a week which is huge!!!

In your position I would put up fees immediately for new customers, but give existing customers at least a couple of month's notice and then only put theirs up by a more manageable amount, say 10% or a bit less, and then build in the expectation of an annual review to catch up gradually. I would however make existing ones aware that your "standard" prices are rising and that you are offering them a better deal as a reward for their loyalty. Also you might want to encourage them to help with recommendations and referrals (if you have any spaces) as you can point out that by helping you to fill your places they can help you to limit or avoid future price rises.

Sorry didn't make myself clear. I charge4.50 some charge 5.50 (extreme) but I was thinking of 4.75 - what do u reckon?

My nursery raise fees annually. I've just gone up from 700 to 740 for 4 days. I was hacked off but wouldn't dream of taking ds out, im a captive market! They give a months notice.

I'd suggest taking it up from £4.50 to £5/hr if you are still cheaper than much of the competition. What are a typical days hours? An extra 25p an hour pay rise doesn't sound much but I appreciate it will add up over course of a month.

It's irrelevant to the parents that you haven't increased fees in ages. It's also not worth saying costs have increased as that's implying the cost increase is to their dc's benefit when actually it's obviously about increasing your profit.

Just say that following a review of your fee structure you are increasing your fees to x. Give a months notice. People can still look for new arrangements if I wouldn't expect it. If you are good at your job.

Try not to get into discussions about it. If really pushed just say you have kept your fees at this level for a long time and you are currently below market rates. End of story.

But costs have increased - gas/ elec /food / fuel.

It's usually about maintaining a profit rather than increasing your profit. The cost of providing childcare has increased dramatically over the past few years, especially utilities, food & petrol. I always increase my fees annually, even if only by 5p an hour, but usually in line with inflation, in April, notifying parents in January. My terms state I reserve the right to increase at any time as long as I give the required notice (my contract states 4 weeks). I have only ever exercised this once, a couple of years ago when fuel prices rocketed, so in that year there were 2 increases.