Birmingham/solihull Providers - Fee Increase Or Not

[Guest]

I need a bit of advice from local providers. In the last 4 years I have only put my fees up twice, about every 18 months. However, I had planned to put fees up in January.

 

However, in the last couple of weeks I have lost two full time children and one part time child because their parents have either been made redundant or they have gone on short hours and simply can't afford the fees and grandparents are going to save them money.

 

On top of this I am finding that we aren't getting as many babies under 12 months as we previously have enjoyed, which I am wondering whether this has now filtered down from the 9 month's paid maternity leave. My Tweenies and Toddlers rooms are doing well and virtually full most days as is my Pre-School.

 

I am concerned that if I put fees up there are parents that might really struggle as they work for themselves and I know times are hard for them.

 

So the question is do I put fees up and risk loosing children, or put fees up and hopefully it will be OK. I have only owned a nursery for 6 years and so don't have the experience to look back, as some of you may, on when we have been in a recession or when times were harder for working parents to know whether I would risk having more parents withdraw their children and having to make some staff redundant.

 

Any ideas or thoughts about what your setting are going to do in this current climate?

[Alison]

we tend to make a small increase every september so that we keep up with inflation then its not such a shock parents expect a small increase and it stops the need for sudden big increases in charges

 

when we put fees up we always urge parents to talk to us if the price increase is going to be a problem the theory being that if one or two cannt afford it we can come to some arrangement, (we dont advertise the fact but if 98% of the parents are prepared to pay the increase we can afford for one or two to continue paying the old price) rather than have an empty place so far it has never happened, all parents accept the fee increases.

[Helen]

Hi Shelia,

Do you know how your fees compare to those of your nearest competitors? Increasing your fees to substantially more than theirs may put you in a precarious position. Having said that, my nursery was the most expensive in my town, with the exception of one setting, and we were always oversubscribed. So I do think if you have a high quality setting that you are very proud of, and which has a very good local reputation, you are on safer ground. (That was, however, before this nightmare economic climate materialised; I closed down in July. )

[Guest]

As well as looking at the market indicators, competition, etc have you actually got a break even figure in your business plan. To know this will help you with your decision making, how much you could afford to go below or above for a period of time, say through this recession.

 

Here is a link to a break even calculator HERE

 

Peggy

[Guest]

It would be wise to check out the competition first and see where you stand already.

We do the same as Alison and increment fees each September as we found a small rise each year was accepted by parents rather than a huge hike every two/three years. We have so far lost no children to financal pressure but we are keeping our eye on the situation although at the moment we have no plan as to what we will do if parents are starting to struggle Perhaps we should start to plan for this now!!!! Food for thought.

[Guest]

Some interesting and helpful replies. Thanks.

 

I have only implemented small rises over the last four years anyway, as I like to keep childcare affordable. We compare quite favourably with most of our competitors, although some of them price themselves differently which can initially seem cheaper e.g. food is extra on top. This can make their fees more expensive than ours.

 

We are a good quality nursery and most of my girls have been with me a long time and so demand higher wages (rightly so).

 

Will give it another week and then decide. Any more suggestions welcome.