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nannyde 04:07 AM 12-17-2010
Originally Posted by VicDelmonte:
Ok, thing is, you aren't including the cost of empty spots.

If you've got all the business you can handle already, of course you don't need discounts. If you have spots that need filling, though, isn't it better to get money in hand now (even if you are discounting some) than to hold out for money from the future that may never come?

Additionally, if you are competing with others in the area that do give discounts, then you aren't going to be competitive without them.

There is a reason that many businesses give a 'bulk discount' - they make it up on volume. This is essentially the same principle.

Is it better to have one spot filled at 300/week and an empty spot, or to have 2 spots filled at an average of 275 each (one for 300, second for 250).

If you start getting so much business/interest that you think the discounted spots can be immediately filled by full-paying customers, just explain that you are discontinuing the discount.
You make some good really good points. I have to disagree on this one:

There is a reason that many businesses give a 'bulk discount' - they make it up on volume. This is essentially the same principle.

That doesn't really work in home child care. If the provider had a signed contract for a substantial amount of contracted notice time then possibly. When you have two children from one family filling slots it is a risk to the business when they leave because traditionally they take a large total percentage of the business.

It's not like "goods" sales where you have X amount of inventory of one item and you offer discounts should a buyer come along and take a chunk of it. With child care the inventory IS the weekly slot and the time it takes to fill that slot.

If you are going to give sibling discounts I reccommend requiring a very long notice period. Something along the lines of three calander months notice should two children leave the day care. I only accept notices on Fridays (payday). If the client has three it should be even longer.

If you are going to give a discount make sure it is specifically for the oldest child who has the highest liklihood to leave care as he/she ages. Then make it clear that the regular rate for the other child will go into affect.

Discounts should ALWAYS be tied into notice time. The agreement with the parents should be that you are giving the discount based on their signed agreement that should they leave care that you will receive three calander months notice when one or more of the children are to leave care. Also keep a weekly running tab that is provided to the parents of the cash value of the discount. If you are giving them a 50 dollar a week discount then it should appear on their receipt weekly what the sum TOTAL of that is on a week to week basis. By week five they should see a line that says "Total sibling dicount to date: $250.00. Next week: Total sibling dicount to date:$300.00.

They need to see IN WRITING the amount of the discount and how it adds up so significantly over time. It's good for the provider to see it in writing too so she understands the magnitude of what she is offering.

I'm not one to give discounts because I don't believe the parents really see it as a discount. Your discounted rate IS the rate for them. They don't look at it that way. If you feel you need to do it you need some way to communicate to them and remind yourself what you are doing weekly.
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