In our last two postings we have discussed how to forecast your weekly tuition and what to do when you rate is not competitive in your market. One of the keys to successfully running a child care program is determining what type of market you will be serving. If you are located in an area with low income and disadvantaged children it may be more difficult to charge premium rates for a superior program. This is not to say that you cannot be successful it just means that you need to analyze what the parents in your market are prepared to pay for services.
In particularly low income communities there are government subsidy programs that you can participate in that offer assistance in paying the full cost of a child care tuition. You will need to meet specific requirements to participate but it may be worth the time to understand and master the government requirements.
Keep in mind that all parents want the very best care for their children. Show prospective parents why your child care center is unique from the rest of the market. Show the innovative programs that you have in place that will enhance that child’s development and studies show that parents will pay more for better care. Keep in mind that there is a tipping point where they will not pay more. Find out what that tipping point is by analyzing your market and conducting some research. If this sounds overwhelming it is not. Everyone knows at least four people with small children. Ask them to serve as a focus group and tell them that you need honest responses. In turn, ask these people who they know that would be willing to serve on a focus group. You will be amazed at the responses to your answers and they will appreciate the participation as from an industry standpoint very few child care centers ask the parents and guardians what they want.
One of the most difficult decisions is to decide to charge based on what clients can afford to pay verses charging what is takes to provide adequate equipment, training and benefits to keep qualified staff. This will always be a challenge but to continue in business you must have a solid financial bottom line. Be true to business principles and in the long run you will thrive.