The Importance of an Annual Tuition Rate Increase
Childcare business owners are their own worst enemy when it comes to delaying annual tuition rate increases.
Many owners hold rates lower than their center can support in an attempt to help the families they serve. And while this is a generous offering, the delay in increase can often impact the owner’s ability to provide strong educational programs, build quality staff and curriculum, invest in facility needs, provide salary increases to deserving staff and take care of other financial obligations--not to mention, sacrificing themselves and their financial wellbeing. After all, can you possibly support the many staff, parents and children in your care if you are worried about making payroll and the mortgage?
So… is it worth it?
Falling behind market rates can also create questions in the minds of prospective parents about the value of the school compared to others in the area—stifling new enrollments.
If you’ve fallen behind market rates and are struggling to meet your expense obligations, consider a new strategy that can benefit your business as well as the families it serves.
One solution? Grandfather current families at a reasonable rate of increase while starting new enrollments at a higher rate.
If knowing when and how much to increase tuition rates is a major issue for your childcare center, check out these great resources to improve the financials of your business: