Rates and Marketing

Child Care Rates

Listed below are the average rates for family child care and center programs in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington counties.

2021 County Average Rates
Cost of Care in Minnesota (Child Care Aware)
Results of the 2018 Child Care Market Rate Survey (MN Department of Human Services)

Books and DVDs

Titles below are available for purchase through Redleaf Press.

Family Child Care Contracts and Policies by Tom Copeland
Family Child Care Legal and Insurance Guide, by Tom Copeland
Family Child Care Marketing Guide by Tom Copeland
Family Child Care Money Management & Retirement Guide, by Tom Copeland
Family Child Care Record-Keeping Guide by Tom Copeland

Titles below are available for check out from the Debra S Fish Library ..

Home Child Care: The Tender Business by Ellie Peters
Family Day Care Providers Management Guide by Clare Cherry
Effective Communication Techniques For Child Care
Dollars and Sense: Planning for Profit in your Child Care Business

How to Set Your Rates

Because your Family Child Care business is your very own, you can decide how you will charge the customers. But planning ahead and having a written policy and contract is the best way to ensure a successful outcome.

Use the Rate Surveys to learn the average rates in your area.
Make a business plan—how much do you need to earn? How many children are you comfortable caring for? Use this information to guide your decisions about rates.
Make an inventory of the assets of your program. Benefits such as your Education, Parent Aware Rating, Accreditation, many years of experience or other assets may be justification for higher rates.
Make an inventory of the deficits of your program. Sometimes your program’s location, presence of pets, home arrangement, or hours open may be less than ideal and your rates may need to be adjusted to attract customers. Ask for an outside opinion if you’re not sure.
Plan ahead for what services will you offer: full-time care, part-time care, evening, weekend, overnight, drop in … you can set a rate for each service or a flat-rate; but if you decide in advance it will help you to strike a deal with potential customers.
Plan ahead for how you will handle these situations: a child is sick, provider is sick, child or provider has vacation, parent is late picking up or dropping off child, parent wants you to hold a spot for a child (usually a baby).
Decide on a payment schedule: Weekly, biweekly, or whatever works best for you and your clients—but determine this in advance and include it on the contract that parents will sign.
Charge up-front and collect the payment for the last 2 weeks up-front to avoid having parents leave while owing you money. If parents cannot pay the last two weeks up-front before beginning care, let them pay an extra $10 per week until that balance is reached.
Plan ahead for regular rate increases or benefit growth (sometimes extra vacation days are added instead of a fee increase, for example). Often this is difficult for Family Child Care professionals; so plan in advance and make it part of your business.

Marketing for Family Child Care Providers

Identify the benefits of your program and communicate them to parents. Your benefits should answer the question, “Why should a parent bring their child to your program?” Benefits explain how your program will help children and their parents: “Individual attention to help your child grow and learn,” “Flexible hours to meet a parent’s busy schedule,” “Parent Aware Star-Rated,” and so on. Ask the parents in your program, your daycare children, other providers, and your licensor for suggestions of benefits that describe your program.
Promoting your program should be seen as an ongoing process that reaches out to current families, prospective families, and past families:
- Communicate regularly with current families about the benefits of your program through regular conferences, newsletter, emails, written notes, bulletin board postings, photographs, or even a web page.
- Offer a finder’s fee to current families if they refer a new family to you that you enroll. This fee can be an offer of some amount of free child care or money (remember, a finder’s fee can be a deductible marketing expense).
- Have a celebration (holiday party, summer barbeque, etc.) where you invite current and past families to come to your home and interact with each other. Current families who meet past families will gain a greater appreciation for your work.
- Keep track of children through letters and photos after they leave your program. Post these letters and photos (with permission) in a scrapbook or on your wall. The best measure of success of your program is how well children do after leaving your program.
- Use an annual parent feedback survey, or a suggestion box, even, to give your parents an opportunity to confidentially offer feedback to you. Then make improvements based on the parents’ suggestions.
Use the services of your local Resource and Referral agency Child Care Aware to help you promote your program:
- Regularly update your enrollment information, including future vacancies.
- Plan ahead for future openings as children advance into the next age category. Keep a waiting list when people call, even if you can’t fill their request right now—you might have an unexpected opening and can call that parent to see if they still need child care.
- Talk to a referral counselor on a regular basis about the supply and demand for child care in your area. Ask for advice about how you can better meet the needs of parents.
Learn about the characteristics of a high-quality child care program. Consider joining Parent Aware. Use this information to compare the quality of care you offer with the rates you charge parents. If you are offering a high-quality program, your rates should reflect this. If you haven’t kept up with the latest in best practices—invest in your education and update your program. The more you are able to communicate the benefits of your program, the higher your rates can be. Too often parents cannot see a difference in the quality from one provider to another and therefore make their decision based on rates. It’s up to providers to show parents what they are paying for. Set a goal of raising your rates once a year, and put a statement that this will happen in your contract.

How to Promote Your Business During a Recession:

The economy continues to be sluggish. This is bad news for everyone, including family child care providers. Laid-off parents stay home to care for their children, thus reducing the demand for child care services. At the same time, some of these parents start offering child care in their own homes to earn more income for their families. The supply of child care increases while the demand for care decreases, making it difficult for providers to fill their spaces.

Providers need to make it clear to parents how to answer these two questions:

Why should I enroll my child in your program?
What does your program offer that other programs don’t?

Your answer will largely determine how successful you’ll be. You may believe that you run a wonderful program, but unless parents agree, you won’t succeed. It’s important to learn how to communicate the benefits of your program to parents.

Quality vs. Cost

When parents are shopping for child care, they are looking for programs of the highest quality for the money they can afford to spend. If they are looking at two programs and can’t see a difference in the quality of those programs, they will choose the one that is cheaper. As our economy weakens, there will be an increasing number of providers who will lower their price to attract such parents.

We believe this is a mistake. Instead, providers should put their energy into improving their program’s quality and better communicating the benefits of their program to parents. Competing on the basis of price alone is a losing strategy. Competing on the basis of quality has a much greater chance of long-term success; and it’s better for the children too.

Features and Benefits

Parents want to know how your child care program will benefit their child. All providers can offer a basic description of their program to parents: “I serve preschoolers Monday through Friday and participate on the Food Program.” What’s often missing is a follow-up statement about how your program will help children learn: “I offer planned learning activities with weekly themes tailored to your child’s needs.”

All parents value education for their children, so use learning-related words to help them understand what your program offers: “I teach your children;” “This is what your children learned yesterday, are learning today, and will learn tomorrow;” “Let me review with you how your child has developed and grown during the last year in my program…”

Accreditation, Credentials, School Readiness, and Quality Rating Programs

Because parents are looking more and more for objective standards of quality, providers should seriously consider becoming Parent Aware rated or accredited through the National Association for Family Child Care. Obtain a Child Development Associate degree if you haven’t already—there are scholarships and incentives to help offset the costs. Such programs set higher quality standards for providers than existing state regulations. Providers who participate in these programs can make a stronger case to parents that their children will learn more and be more successful in school.

If you want to learn more about these programs, contact the Professional Development Coordinators at Think Small 651-641-3549.

Specific Marketing Strategies:

Competing Against Child Care Centers

You may not offer everything that a child care center does, but you will always have some benefits that a center does not. In particular, family child care providers generally have the advantage in these areas:

A home environment for children with lower child/staff ratios, which will help them learn more quickly
Individually prepared, nutritious meals
A consistent caregiver as the child grows older
A comfortable, familiar environment for infants with individualized care to help them thrive
Mixed age groups that allow siblings to be together, and long-term friendships to develop

Competing Against Informal Providers

During a recession, it is likely that there will be an increase in the number of providers who operate outside of your state child care regulation system. This includes providers operating legally and illegally. In either case, these providers are likely to be charging less than you do.

As you interview parents, promote your program using these techniques:

Emphasize the health and safety aspects of your program: “I am licensed, which means that my home has been inspected for safety, and my family has been screened for criminal background. If you are considering enrolling with an unregulated provider, you should consider the fact that I have met higher health and safety standards.”
Tell parents that their child will get nutritious food on a daily basis because you are enrolled in the Food Program.
Don’t compete based only on price. There will always be someone who charges less than you do. Instead, stress the value of your program: “I offer a variety of planned learning and play activities that will help prepare your child to succeed academically and socially in school.”
Emphasize the benefits that unregulated caregivers are unlikely to offer: “I have specialized training in child development, so I can respond quickly to your child’s needs.”

Remember, you can’t hope to appeal to everyone, and some parents will always pick the cheapest care. Let those parents go with a friendly reminder that you will be happy to visit with them if they find themselves in the market for child care again one day. People usually get what they pay for. If parents can see the value in your program, most will pay more for higher-quality care.

Here are some strategies for marketing your program to parents:

You can have different policies and contracts with different parents. If a parent needs to pay on the 1st and 15th of each month rather than every week; accommodating their schedule will build loyalty. The same is true for pick up /drop off times; in a difficult economy this may be something you want to adjust (even on a case-by-case basis) rather than simply lowering your rates.
Prepare a brochure describing the benefits of your program. Include testimonials from current and past parents in your program.
Some parents are looking for a formal education environment for their child. For these parents, consider adopting a business name that highlights the educational aspects of your program: The Little Academy, The Learning Corner or Sue’s Discovery Center.
Other parents may want a program that emphasizes a homier, loving, and caring environment. For such parents you may want to give your program a more friendly name: Cozy Bear’s Child Care, Just Like Home Day Care, Lee’s Tiny Tots.
In describing your program to parents, highlight any special services you offer (piano lessons, second-language training, numerous field trips, curriculum, swimming lessons, etc.) and explain how these will enrich their child’s education.
Offer parents daily notes about their child’s activities, and annual or bi-annual conferences to discuss the child’s developmental progress.
Distribute a parent newsletter; include tips and articles about the latest in child development as well as summaries of events and activities that occurred in your child care, to help create a “village” atmosphere.
When talking to parents, stress the family nature of your services. Hold gatherings at your home (holiday parties, summer picnics, etc.) and invite all the family members of your clients.
Invite parents to share their family traditions with the group; do a recipe exchange or ask them how they arrived at the names for their children. Feature one family each month in the newsletter—include favorite books, activities, or music in their profile.
Help parents identify community resources and services such as local clinics, child care assistance, public health services, preschool screening, school district offerings, low-cost stores, garage sales, etc.
Get involved in community activities and connect with your neighbors so you will receive word-of-mouth referrals.
Be open to providing occasional back-up care for your client’s friends or other providers’ clients. This not only builds goodwill and camaraderie, it broadens your base for word-of-mouth referrals from families whose children enjoyed a day at your child care.

From the Family Child Care Marketing Guide by Tom Copeland, Available through Redleaf Press.

For Early Childhood Professionals