Do you know who your ideal childcare client is? You know, your dream parent or family. Have you ever thought about it? Who would be your perfect client? Well, today we are going to figure out just how to identify who that is and why it might be one of the most important things know for your business.
A problem that many providers may have at one point or another with their business is – What should you do if your childcare competition is less than you are. If you have dealt with this issue I am sure you must have thought “OH NO! They are probably going to steal all of my clients.” I’m I right? Or maybe you started thinking the only thing that you could possibly do would be to slash your rates. Well, hold on there! Before you do that Walmart thing and flip your prices down, let’s take a step back and really take a look at how to handle this issue without devaluing your services or business. Here are 5 areas to look at to handle what to do when your childcare competition is less than your rates.
What do you do if your competition is less?
1. Analyze the competition
Who is your competition?
Before we can figure out what to do, we first need some key information. So who is your real competition? I say real competition because more than likely not every childcare in your area is competing for the same clients. So determining who is your competitor is key. In an upcoming post, I will address how to identify your ideal client. Until then, think about this …
Are you in direct competition with the preschools, daycares or possibly other family childcare in your area?
Competing with what?
Once you have determined who your competitors are the next thing we need to know is what rate are you competing with. Plainly put, how much are they charging?
This is a tricky one!
Since most providers (myself included) don’t post their rates on websites or even give out that information over the phone, getting specific rates can require a little sleuthing. I should say that I personally don’t really like the idea of going to your competitor and posing as a potential client. That just seems underhanded to me.
That being said, it is possible to get that information. One way is to check on consumer awareness sites like Yelp. Often times clients will give information that the business might not. Another way is to ask potential clients who may have toured other facilities. If you are not able to get this information, often times the local CCR will provide a typical rate range for providers in your area.
2. Consider Collaboration
There is the tendency for people who have similar businesses to consider each other as competitors that are pulling and tugging at the same clients. The problem with that mindset is that providers might miss opportunities to collaborate with that other business. Instead of being intimidated by the other business we should look for ways to partner with them.
Here I wrote about how to encourage collaborations with other childcare businesses.
3. More is More childcare competition is less
It may seem simple but one way to deal with competition is to simply outperform them. When you were researching your competition you probably got a good idea of what they had to offer. Well, do more!
You might decide to offer different hours, minimum age of enrollment, specialized meals, etc. anything that might give your childcare an edge. Check out this post for different services you might consider.
4. Experience Matters
You know just because you are not the lowest in town isn’t necessarily a bad thing. If you have years of experience, child development education, a specialized service, etc. you probably should not be the lowest in town. So I would say to always take into consideration the experience (or lack of) that your competitor may have. If you have more, you should probably charge more. Maybe your business should be at the top of the heap.
5. Stress Your Advantages
Instead of running in the other direction and considering a rate drop, you could simply stress the advantages that your business has over those competitors. Maybe take opportunities during your tours to stress the advantages your business provides.
Years ago I felt like the larger daycare centers had such an advantage over my little childcare home. Armed with that mindset, instead of making it a disadvantage I decided to use it. At tours, instead of stressing my small childcare, I use words like “intimate” and “family-like” to emphasize the advantage of my smaller environment.
Businesses Can Co-exist childcare competition is less
So before you start running the numbers in your head trying to see how much you can afford to cut your rates, think about this – there are usually several businesses who potentially have the same customer. Target and Walmart have learned to co-exist quite nicely. We don’t always have to think of competition as a bad thing. Even if that childcare competition is less.
Don’t Let Competition get you down!
What do you think? Do worry about your competition being less than your rates? Please share ways that you keep your childcare business competitive in a comment below.
Today I thought I would talk a little bit about why you need a Pricing Strategy for your Family Child Care (FCC). I say strategy, but really its more of a pricing policy for getting paid what you are worth. Spoiler Alert: it’s actually not going to lead to a rate of pay that is anywhere near what you are worth. What it will do is get you into the habit of charging a FAIR rate of pay and hopefully give you a sound base to build your business on. Here are 10 Reasons Childcare Providers Need a Pricing Strategy.
Do you find yourself continually answering the same questions over and over? You know, common questions that potential or new clients ask about your childcare business? Have you ever thought of creating an FAQ? An FAQ for childcare can be a tool that might give you a break from repeated questions.
Do you struggle with client communications? Specifically, do you feel that parents just aren’t following your policies? Maybe you think they are doing this on purpose and just running over you. Today I want to ask – What would you tell your clients if you had the chance? Would you tell them to be better at following your policies and rules? Well, today we are telling those parents but good! Here’s the What, Why, How and When to tell your clients to follow your childcare policies.
“I know! I need to grow a backbone for dealing with parents.” I hear this from providers all the time. Believe me, I have been there too. As providers, sometimes we find it difficult to effectively enforce our policies with clients. That’s why today I will show you why growing that proverbial backbone and feeling confident in your client communication is so important for the childcare provider. So if you think you need to grow a backbone, keep reading! Providers need to Grow a Backbone
Why Providers Need a Backbone
With a new year, comes thoughts of starting off fresh. The new year always gives me the urge to purge. I start looking around and deciding what can go and what new things we need. While it’s true that many things just get worn out and need to be tossed, somethings just need a good clean and they will last another 10-20 kids or so. So today I thought we would see which are the best ways to clean and revive childcare toys and equipment. Ways to Clean Toys
Usually, when a provider thinks about starting their childcare they think about all the things they want to do. We have grand plans for curriculum and caring for the children we hope to get. We probably rarely think about what are some things we don’t want to do. Well, today I’m going there. Here are some things that I stopped doing at my Childcare … and why.
8 Things I Stopped doing at my Childcare
1. Undercut my Business and Me
For most new providers it is all about getting the client. I mean we started a business but until we have paying customers, it’s not really real.
I know it was that way for me. To be honest, I am not really sure I put that much thought into how much I wanted to be paid for my services. But because I didn’t do my homework, often times I found myself in what could be called negotiations for my rates.
Years later when I created a rate worksheet I was confronted with just how underpaid I really was. Although I wasn’t really expecting to get rich, I did expect my business to cover expenses and provide me a livable salary.
That worksheet saved me!
Even though I developed it as a handout for prospective clients, it really provided an “Ahh ha” moment for me. The worksheet broke down my rate to the hour and I finally realized that I couldn’t afford to undercut my business anymore.
Now every time I think about cutting my rate, I remember that hourly rate.
2. Bend My Policies
Even though I started with a contract, I will admit I don’t think I had any hard and fast policies. In the beginning, you don’t really know what you don’t know.
As time went on, I slowly put in place policies that I noticed were becoming issues with clients. But even then, if I was challenged more than not I would bend my rules. This was long before I grew my backbone and learned to stand up for my policies.
Policies are really the core principles of my business.
Over time I realized that my policies were really the core principles of my business. And just like the personal principles we have, I should think long and hard before bending them.
When I was a child, it probably didn’t take too much convincing to get me to break a rule here or there. Especially if it was in favor of something fun I wanted to do. But as I matured, I held on to core values that I was determined not to break.
I think the same is true for our businesses. As we grow our businesses and mature, there should be core principles that we cling to. By then we know the WHY. So no matter the WHO or the WHAT we need to stand firm and lean on our backbone.
Sometimes the right answer is NO!
3. Think people won’t challenge me
I have had clients who seemed to be a bit confused about our relationship. You know the type. They think you are a nanny. Or even worse, as an employee of their families company.
After being blindsided with requests for special treatment over and over again, I realized that no matter how nice I was, there will be people who challenge me.
They might simply need clarification of our relationship. But before I could inform them of who I was I needed to prepare myself by being confident in my role.
If not expect to be challenged, at least be prepared.
For me, I realized that I needed to clue clients in on my job functions, responsibilities and finally my time. I developed short concise responses to questions like “Why do I need to sign a contract?” or “Can I switch a day for the holiday?” or “Can I just bring you the check next week?”
Because if I wasn’t prepared with the “Why” or the “Why not”, I was setting a bad precedent for our business relationship going forward.
5. Not get a Contract
Speaking of contract issues, it took me awhile but I finally realized that it was best if I got everyone under contract. Yes, EVERYONE!
Too many times, a client would try to rewrite or back out of an (verbal) agreement we had made. Typically, it was a temporary arrangement, which is probably why they felt so comfortable breaking it.
This is another opportunity to establish the professional relationship with the client.
Here again, I was missing an opportunity to establish the professional relationship with the client. By making casual arrangments, I was treating our relationship too casually.
No more! Everyone gets a contract.
6. Accept Late Payments
If you have been a provider for any time at all, you probably have heard many of the excuses for why the tuition is not paid on time. I know I have heard them all!
I once had a client who routinely would pay me late. She would wait until the grace period was up and then submit her payment. One time she mistakenly sent me a text meant for her husband asking him to upgrade their airplane tickets to first class. But she paid me late! I mean SERIOUSLY!
What needed to change here was ME.
But in all honesty, what needed to change here was me. I was making her unacceptable behavior acceptable. When I finally got that, I made a change.
What did I do?
I adjusted the due date for tuition payments and rewrote the late fee policy. I took back my power and enforced a core policy for my business. Yea me!
7. Hold a Spot
Like I said before when you have a new childcare business you need clients. Sometimes you can get consumed by trying to find clients. I remember those days, who am I kidding, I still have those days.
When the enrollment dips, it is quite natural to step up recruitment efforts.
Early on when I would meet with prospective parents who didn’t have an immediate need, I would get talked into holding spots. I’m sure I reasoned that a future client was still a client.
The thing is, holding open vacant spots is not exactly filling an open spot. In reality, it is like asking someone to hold off selling their house or car because you might want to buy it in the future. Crazy right? Who would do that?
That is exactly why you shouldn’t do it either. Yes, you need clients, but actual clients.
Now don’t get me wrong, I have a Pre-Enrollment Program that addresses the need for people to reserve a future enrollment spot. But by reserving the spot they are required to leave a deposit to ensure that they will be occupying the spot.
The key here is they have to pay for it.
There were too many times when a parent would ask me to hold a spot only to back out in the end. I soon realized that I could not afford to hold spots. I can reserve upcoming spots, but current vacant spots needed to generate income.
8. Not Raise Rates
Remember when I said I created a Tuition Worksheet as a handout for prospective parents? Well, out of that exercise I realized that I needed to plan to periodically raise my rates.
When you consider that most providers make an hourly wage that is close to half the minimum wage, most providers probably need to visit their rate structure at least every few (more like every 1-2) years.
If your expenses go up, so should your rates.
If your business grows, and I hope it does, that probably will involve more expenses. Look at it this way, in the corporate world employees can typically expect to at least receive a cost of living raise. If they don’t they may consider other employment opportunities.
While providers, of course, should consider keeping their rates competitive, at the same time education, experience, and program offerings should be main considerations for rates.
8 Ways I Attack Burn-Out
There you have 8 things I have stopped doing at my childcare. Isn’t it funny how not doing something can actually be beneficial? By stopping counterproductive habits I strike back at the burn-out monster before he has a chance to attack.
Tell me, what are some things you have stopped (or what to stop) doing at your childcare. Leave me a comment below and tell me the what and why.
You know that old adage “Failing to plan is planning to fail”? Benjamin Franklin said that by the way. Well, I found that in most cases this is true. The fact is we get busy and if we haven’t made a plan for your childcare or at least written down our goals we tend to forget them.
In fairness, if you run a childcare you are a very busy person. So forgetting things especially if they are ideals or goals is very likely.
But it doesn’t have to be. We can take some time at the end of the year (like right now) and look forward to what we want to accomplish for the coming year.
Now that the Holiday season is upon us I wondered what was on a provider’s wish list. Let’s see just what’s out there that providers would love to have at their childcares this year. Some don’t even need batteries. Imagine that! I started this last year, and it was so much fun. So here it is the 2nd Annual Holiday Gift Guide for Child Care.