Start a Child Daycare Business – Pricing Your Services

Many entrepreneurs wanting to enter the daycare business have lots of questions about how they should price their child care services. Let’s take a look at some of the factors that you may consider when formulating an approach to pricing for use in your daycare.

1) Don’t overprice your services. Unless you have an established brand or really have something unique to offer then you will miss out with this approach as parents can and do shop around.

2) Don’t price your services too low. Many new child care center operators think that a great way to get business fast when they are just starting out is to come out with pricing that is considerably lower than competitors. This approach could lead to customers perceiving the quality of your services to be poor. You may get some bargain hunters but you will barely be profitable and if you do try to raise prices later on you will have some disgruntled parents on your hands. If you do start a price war then you will damage the whole industry locally and all players will suffer as a result.

3) Look carefully at the prices that competitors are charging and what they offer for the price. You can then choose prices that are in line with the market average or price a little higher if you feel that you offer better quality and you can convey this in your marketing.

4) To take a more independent approach you could work out a rate by calculating the costs associated with having a child attend your center assuming that you are operating at a reasonable capacity of 70% to 90% full. Simply calculate total costs of operating at that hypothetical level of capacity and divide this number by the number of children attending at that hypothetical level. You can then add on a reasonable amount of profit for each child and you will have a total amount to charge parents.

5) Most daycare centers offer a variety of programs and schedules so you will have to offer a menu of different prices for the various services on offer. When you are calculating prices and costs you should bear in mind that younger children usually require much more time from caregivers in comparison to older children. Your pricing should therefore be structured so that parents of younger children pay higher prices than those of older children.

6) Have considerable discounts available for families that sign up more than one of their children for your services.

A successful approach to pricing your daycare services should aim to be charging parents market value or prices slightly above market value that are backed up by better than average quality and a great sales process. Don’t devalue your services and leave money on the table by trying to compete on price when there are so many better ways to compete. How you price your daycare services will go a long way towards determining your level of success in this industry.

For more advice on how to start a daycare center and run it successfully visit -

http://www.startadaycareservice.com