Canadian Parenting and Child Care Community

Child Care Providers => Starting a daycare => Topic started by: Mike on February 09, 2016, 04:30:54 PM

Title: FYI: how much to charge
Post by: Mike on February 09, 2016, 04:30:54 PM
Everyone starting a daycare/dayhome or whatever it's called in your province or territory is faced with the question: "How much should I charge?"

That question can't be answered in a single post for everyone, but I can post information that will help you figure it out. Prices vary based on many different factors, like:

So, how much do I charge?

Start with investigating your area

Find providers in your general area and do 2 things. Find out what their prices are and find out if there is need for another provider. You may find 3 people within a couple blocks, all with openings. You may find nobody in the area. If you find nobody in the area, that may be a sign that you are needed. Search farther away to get pricing ideas. If you find providers but they don't have public prices, ask them. You could even ask them about the need in the area. If they are booked up a year from now, they won't be afraid to tell you there is need. If they have openings, they won't be afraid to tell you your services aren't needed.

Find people looking for services in your area. Quite often, they will be looking for future care and they may be interested in your services. When you have an idea of what you want to charge, see if they are willing to pay that.

There are multiple ways to find providers and parents.
Kijiji, local paper classifieds, craigslist, local bulletin boards, schools, employment agencies, local YMCA, local kid clubs, Internet searching

You should now have an idea of the price range for your area.

Now do some calculations

What are your monthly fixed costs of running the business?
- If you're using 1/3 of your home for child care, figure 1/3 of your utilities bills.
- If you're renting, include the percentage of your rent.
- If you own the home, include the percentage of your mortgage payment. It's not really an expense because your home is an asset, but you could buy a smaller home if you weren't doing this.
- Do you need insurance? Usually you do.
- What about cleaning supplies and other things you won't need so much of if you don't do child care?

What are your monthly variable expenses?
Some of these are affected by how busy you are. If there is a need in your area, you can probably plan on 80% capacity on average fairly safely.
- How much for food? Healthy food, not cheap stuff. Feeding 5 children isn't free.
- What about outtings? Event cost? Transportation? If you're lucky, you have something free within walking distance.

Don't forget other expenses.
- Advertising. You will have to do some, although there are lots of free options.
- Bookkeeping. You're running a business. This is mandatory.
- Legal documents. You better have all the documents. This wouldn't be much of a monthly expense, mostly startup.


Now figure out your total cost per month, and how much you will bring in at 80% capacity, and figure out the net income. Is it worth it? If you're still making a decent profit, you could lower prices a little. If you're not making enough, you could try higher rates. Some people will pay more. You just need to convince them you're worth it.

DO NOT start with low rates to get clients and plan to raise them later. Not a good way to start a business, any kind of business. It gives a low quality reputation, and you don't want those clients. Plus, you can't just raise your rates after someone signs up.


There you have it. Figure out a rate, advertise, and see what happens. Good Luck  :)
Title: Re: FYI: how much to charge
Post by: rachelehi@outlook.com on December 11, 2016, 03:16:08 AM
Thank you this is very helpful!!!!
Title: Re: FYI: how much to charge
Post by: nancytaylor on January 09, 2017, 07:58:01 AM
Very helpful, me and my husband do want to open a daycare, still in planning stage.
Title: Re: FYI: how much to charge
Post by: Mike on January 23, 2017, 01:32:51 AM
Very helpful, me and my husband do want to open a daycare, still in planning stage.

Planning is good. Many people just get an idea and jump in. Those ideas rarely ever work. Good luck.
Title: Re: FYI: how much to charge
Post by: Tegan on September 14, 2017, 02:47:21 PM
Hi!  This message gets to what my own post (which has no responses yet) was asking.  Here it says to figure costs factor in percentage of your home/ rent/ food/utility bills, etc....there is quite a list!!!! yes for all that people supposedly factor in what I'm hearing from other posts is still that on average people are charging very small amounts - like $3 an hour or less for a full day of work.  I still don't understand why so little and how on one hand people are saying we charge a maximum of $30/day while others are saying you need to factor in all these things (which would work out to far more than $30 a day)  I'm so lost. Which way is right?