Nursery Prices
14 Ideas For a Smarter Pricing Model
Inspiration to restructure and improve your revenue

Is it time for you to restructure your nursery prices?

Whether it’s rising staff costs, business rates, or the financial juggling act that is the 30 hours funding, it’s more important than ever to make sure that your nursery’s pricing model is giving you the revenue you need to run an outstanding setting.

We’ve left no stone unturned in our quest for every nursery pricing model out there. Time to revive your revenue and make sure you have the cash flow to make a difference to your setting.

1. Fixed Day Prices

To figure out where you can go, you have to start at the most basic of nursery pricing models. Simple, fixed day prices.

How does it work?
Does what it says on the tin. You charge one fixed price for the whole day, no matter the age of the child.

What’s the point?
But simply it’s, well, simple. But once you go deeper into nursery admin it starts to fall down pretty quickly….

Any negatives?
This approach to nursery prices is just too simple. You’re not giving parents the flexibility to choose morning and afternoon sessions, you’re not maximising any opportunities for extra revenue, and it doesn’t give you any wiggle room with funded hours.

2. Fixed Session Prices

This is much closer to the model that the vast majority of nurseries begin with. Pricing longer sessions at a fixed price to offer more flexibility.

How does it work?
Most nursery prices include AM, PM or full day sessions. These can either be inclusive of lunchtime or exclude that hour (you’ll find out why you might want to do this later). All consumables like snacks, lunch and other consumables are included within this, and parents can choose to use their funded hours on whichever sessions they like.

What’s the point?
More flexibility for parents who might not need full daycare. Choosing nursery prices where everything is included makes your accounting easy and keeps it nice and simple for parents to understand what they’re paying.

Any negatives?
Sure. By offering everything all inclusive, and allowing parents to choose which sessions they take as funded, you might be losing out significantly on those funded hours. What’s more, you’re only giving parents limited flexibility – they’re still constrained to two types of sessions, and no wraparound care.

This is how the Nuffle Bear Day Nursery in Surbiton, London, set out their prices. Source https://www.nuffieldhealth.com/gyms/surbiton/services/nuffy-bear-day-nursery/nursery-fees

3. Pricing by Age Groups

We’re still operating in pretty ordinary territory for most UK nurseries here. It’s all about the different costs associated with the different age groups…

How does it work?
Up until recently, the consensus was that younger children should be charged at a higher rate. That’s because they require higher staff-to-child ratios meaning higher staffing costs for you.

However, with the problems surrounding the 30 hours funding, some nurseries are now charging more for the 3-4 year-old age range in an effort to make up for the shortfall during the non-funded hours.

What’s the point?
Which route you choose really depends on the needs of your local area, and which you think is a bigger burden on your revenue – increased staffing, or the underfunded 30 hours scheme. Bear in mind there are other ways you can make up for the shortfall which we’ll go on to later.

Any negatives?
Not really. Most nurseries use some sort of tiered pricing system. So long as you’re clear and ready to answer parent questions, it shouldn’t be a problem.

4. Full-Time Packages

One thing to consider adding to your pricing plan is a full-time package that offers parents full daycare throughout the week.

How does it work?
A full-week package is for parents that have their children in the nursery all day, all week long, offered at a discounted rate. You could also consider packages that include a set number of sessions during the week for parents who don’t need full care.

What’s the point?
It’s probably not a great idea to offer these full-time packages as the only option at your nursery, as many parents won’t need this type of full care. But by offering packages at a slightly discounted rate, you’re ensuring reliable occupancy across the week, and keeping things simple for the type of parents that need that care.

Any negatives?
Offering extra options which both improve your occupancy and offer parents a cheaper option are likely to be beneficial to your business.

5. Add Per-Hour Sessions

The opposite end of the scale is allowing parents the true flexibility of per-hour sessions.

How does it work?
Instead of just having fixed sessions, you also give the price per hour, allowing parents more freedom over the session length.

What’s the point?
Given the added flexibility, there is a strong case for making these sessions more expensive. After all, they will probably take a little more legwork to organise. As a result, they can be a great revenue stream for parents who are happy to pay more for a more flexible service.

Any negatives?
While the flexibility is a positive, it can also play havoc with your rotas. Without a smart system to organise when people are coming and going, getting those staff ratios right can be difficult. It might be worth considering adding restrictions on when these can be taken to ensure children aren’t constantly coming and going.

6. Late Fees

Ahh. Not an easy one this. Is it time to start considering a late fee in your nursery prices?

How does it work?
You can either have a set charge for every 15 minutes a parent is late or simply have a more standard fee for picking up after a certain time beyond pick-up.

What’s the point?
Not everyone likes collecting this sort of money from parents. But if you’re constantly having staff stay late when parents aren’t on time, or having to adjust your ratios just in case parents don’t make it, there’s no doubt it’s costing you revenue. This will vary from nursery to nursery, so make sure it’s actually an issue before you start putting a policy in place.

Any negatives?
It’s not 100% guaranteed to work. In fact some studies have shown that by including late fees in your nursery prices, it can actually make parents arrive to pick up their children later. Food for thought. Speaking of which…

7. Consumables

The introduction of 30 hours of funding has been a challenge for many nurseries. And charging consumables is one way to ensure a reliable revenue stream.

How does it work?
While you cannot make it a condition of taking up funded places, you are allowed to charge for consumables within those funded places. This means lunch, snacks and tea. This means nappies, wipes and any other consumable items you offer in your setting.

What’s the point?
With the underfunding of the 30 hours program, many nurseries have a shortfall between the price they normally charge and what they receive from the government. Charging parents for consumables, which are not intended to be included within the free funding offer, is one way nurseries can make up for the shortfall.

Any negatives?
Again, this becomes a balance between increasing revenue and making things more transparent and clear for parents. You may want to only include consumable charges for those taking up funded hours, and keep it simple with an all-inclusive price for non-funded packages.

These are the nursery prices for Granby Nurseries’ setting in Parkgate, Rotherham – including late fees. Source http://www.granbynurseries.co.uk/childrens-nurseries/nursery-fees/

8. The Lunch-Time Funding Break

More 30 hours ideas. This time, it’s about making a break for lunch so that parents have to take up at least one hour of paid childcare.

How does it work?
Say you offer a morning and afternoon session. You could offer the morning session from 8AM-12PM and then the afternoon session from 1PM-4PM. You’re perfectly entitled to not allow the hour in between to be taken up using the funding.

What’s the point?
This pricing method means that parents have to pay for at least one hour a day if they want their child to be in continuous care, and you can use this hour to make up for some of the shortfall throughout the rest of the day.

Any negatives?
It’s not exactly recommended by the government. One outcome of this method is that parents could choose to take their child out of the setting for that hour, and the government suggests that continuous care should be offered wherever possible. However, if you feel it’s necessary to find some way to make up for the funding shortfall, you won’t be the only nursery taking this step.

9. Ad-Hoc Prices

Things come up all the time for parents. For that reason, offering ad-hoc prices allows you to add sessions or products to parents on a one-time basis.

How does it work?
You’ll need a strong understanding of your day-to-day availability, but you simply have the ability for parents to contact you and book in ad-hoc sessions on a more immediate basis.

What’s the point?
Because of the demand, you’re able to offer these sessions at a higher price point, and generate more revenue.

Any negatives?
By and large no. Many parents will understand that if they want to book a session at shorter notice, they will have to pay a little more for the privilege.

10. Discounts

Package discounts are the only kind of discounts you can include in your nursery prices…

How does it work?
It could be sibling discounts to encourage parents to enrol future children. It might be volume pricing, where the more sessions a parent books, the cheaper they are. Or it may be a one time refer a friend discount. When a new starter has been referred by an existing customer, you could offer them both a one time discount to encourage word of mouth marketing amongst your parents.

What’s the point?
Quite simply, if it’s encouraging an increase in your children on roll or your day-to-day occupancy, it’s probably going to be worth the cost.

Any negatives?
Just make sure you take the time to do your maths, and ensure that the financial benefits are outweighing the financial loss of the discount.

Hopscotch Nurseries in Brighton & Hove have extensive pricing on their website, including discounts. Source http://www.hopscotch.uk.com/how-to-pay/fees-funding-brighton

11. Drop & Shop Sessions

This isn’t an easy one. But shorter, ad-hoc drop-ins are the next level of flexibility for busy parents.

How does it work?
Some nurseries have managed to make it work. Essentially, you allow parents to book shorter, by the hour sessions with convenience in mind. That probably means the ability to book at very short notice.

What’s the point?
This is the most flexible option we’ve managed to find. In that sense, it’s really all about making your offering as attractive to parents as possible.

Any negatives?
As with some of other options, you’re going to need a very clear view of your occupancy and availability, along with a simple booking or messaging system with your parents. There’s also some concern that these type of short sessions leave no room for planning and proper child development, and could prove disruptive to your rotas and general planning.

Zizu’s Nursery in Middlesborough is an example of a nursery that has taken flexible hours to new levels. Source https://zizusdaycare.com/services-we-offer/

12. The Weekends

Have you considered whether your setting could be used over the weekends? There’s a whole range of possibilities.

How does it work?
All depending on your licensing and insurance, it may be that you could hire out your nursery over the weekend. That might be for children’s parties, or for more casual weekend child care.

What’s the point?
It’s about thinking about the assets you have, and how they could be used during times when you’re not currently open. With the unusual hours you’re offering, this could be a real niche in your area.

Any negatives?
Depending on the competition in your area, the demand may not really be there. Also if you are going to be offering casual childcare, the organisation and staffing over the weekend could put a real burden on you as a business owner. Consider ways in which you can outsource the work that gives you the chance to have some time off.

13. Trips, Classes & Special Visits

Trips, classes, and special visits are another great way to add extra value to the day-to-day running of the setting.

How does it work?
It could be for special nursery day trips, or it might be classes like foreign languages, swimming or dance that you run. Either way, charging parents a little more than the cost to help boost your revenue is a sure fire way to make up for shortfalls and increase your margins.

What’s the point?
Charging parents for classes and nursery day trips over and above your usual charges are a way to provide an even more engaging childcare experience and add some revenue to your bottom line.

Any negatives?
Many parents may expect some of these things to be included, and others may not be able to afford the added cost. What’s important is that you gauge your parents correctly to ensure that certain children are not being excluded unfairly from important activities, and that you’re still taking children out of the setting on more casual trips as part of the regular sessions.

14. Raising Your prices

One final point to consider – are you charging enough for your current sessions?

How does it work?
There’s really two ways to work out your nursery prices. You can either start with your costs and calculate what you need to charge to have a strong profit above that. Or you can look around at your local area, understand your own position within that market, and choose your nursery prices based on what value you are offering compared to others around you.

What’s the point?
Many nurseries are undervaluing themselves. By at least assessing how high you could raise your nursery prices, you may realise that you can keep happy parents, still provide a great service, and make more money to put back into your business.

Any negatives?
It’s never easy to raise prices, but if you can explain how and why you’re going to do it, with plenty of warning, it’s often much smoother than you might think. Ensure that you inform all parents well in advance of the changes coming into place, and make abundantly clear exactly why your prices are going up.

Look back to how long your prices have remained the same and inform them of this too. People are not unreasonable and will understand that when your costs are steadily rising, you can’t afford to be charging the same.

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