Operating a daycare center, either in your home or in a commercial location, is a satisfying career choice if you want to own your own business and work with children. However, like any business owner, you will have to meet overhead costs. Rent or mortgage payments, utilities, supplies and staffing costs add up -- if they increase, you may have to raise your rates. It is important to inform parents about rate increases in writing. Communicating information clearly and giving valid explanations helps prevent misunderstandings and disgruntled customers.

Write a greeting to the parents. Use your word processing program’s mail-merge function to personalize each letter.

Describe some of the positives of your daycare business in no more than one paragraph. Mention some recent highlights, improvements that you have made or training that you have received. Remind parents of the value of your daycare facility.

State that you will be increasing the rate to maintain the quality of your daycare center. Indicate exactly how much the rate will increase and the date that the rate increase goes into effect.

Explain why the rate increase is necessary. For example, state laws restrict the number of children allowed in daycare centers, and therefore their ability to grow. Explain that your operating costs have increased, and you need to increase rates to continue to offer quality care.

Offer parents the chance to ask questions or discuss concerns with you. Provide your phone number or email address, even if parents already have your contact information.

Outline instructions for parents to approve the rate increase. Add a tear-off form at the bottom of the letter that parents can sign and return to acknowledge the rate increase, or simply include a space where they can sign to indicate their acknowledgement.

Thank parents for their understanding and for the opportunity to care for their children. Sign the letter.


Provide adequate notice, usually at least 30 to 60 days, so parents can adjust budgets or make alternative arrangements.


When increasing your daycare rates, be sure that the increase and communication is in line with any contracts that your customers signed when they enrolled their children in your center.