CEO Shelly Sun on how to start a home health agency | Chicago TribuneNovember 28, 2012
The Chicago Tribune featured a lengthy profile of BrightStar Care CEO Shelly Sun in the November 19 Business Section. The profile details the story of the company’s past, present, and future. The writer, John Carpenter, interviewed key figures in Shelly’s personal life, as well as the franchise and homecare industries: Shelly’s husband and BrightStar co-founder, JD Sun; Shelly’s friend and mentor, Gloria Jean Kvetko (founder of the coffee franchise Gloria Jean’s); the president of FranNet, John McClellan; and the director of operations for the National Private Duty Association, Kevin Smith.
Home-care CEO sees Bright future
Sun predicts growth for her business as more Americans turn elderly, need aid
By John Carpenter, Special to the Tribune
Published: November 19, 2012
It’s not unusual for business owners, even male business owners, to describe the start of their companies using the metaphor of childbirth. But when Shelly Sun tells her version of how to start a home health agency, it hits closer to home, and not just because she’s a mom.
The CEO and co-founder of BrightStar Care was pregnant with twin sons in January 2005. She was wrapping up a major project at work and thought she had plenty of time to get it done before her due date. Then her doctor ordered her on bed rest.
“Because I’m a workaholic, I got a computer station set up in my bed so I could write all the operations manuals,” she said. “I filed the legal entity for our franchise on Jan. 21 of 2005 and we delivered (the twins) on Jan. 28 of 2005.
“Yes,” Sun continued with a laugh, in a tone suggesting the story has surprised people. “I filed our legal entity to begin franchising from bed, while on bed rest.”
J.D. Sun, her husband and co-founder of BrightStar, said that story says something important about his wife.
“I could have said: ‘Why don’t you just relax and, you know, have your babies.’ And she would have said: ‘I am relaxed. This is what I do.’
“My wife has laserlike focus,” he said. “It’s who she is.”
That focus appears to have the company firmly in the growth lane of an expanding sector. BrightStar Care, founded 10 years ago before becoming a franchise three years later, appears to be riding a demographic wave that creates 10,000 American 65-year-olds every day. The company has grown from one location, in Gurnee, to more than 250 across the country…
Sun, 42, is matter-of-factly bold when asked where she sees the company … 10 or 20 years from now.
“I think we will be in 30 countries. We’ll be in multiple brands that all impact consumers. … And we’ll either be owned by an insurance company or a large hospital network, or we’ll be a publicly traded company,” she said.
This is an aggressive forecast, said John McLellan, president of FranNet of Chicago, a franchise business consulting firm. McLellan said BrightStar is recognized as a leader in the franchise world, and he’s not surprised Sun is thinking big.
“They have done very well, but they are operating in a very competitive environment,” he said. “Is it possible? Sure. Maybe the whole category is going to grow as well. But they have an awful lot of people nipping at their heels.”
For Sun, the business model can’t be separated from her and her husband’s first experience in the world of elder home care. They were looking for help for her husband’s elderly grandmother and were surprised by the discount store feel most companies had.
“What we saw was that everybody was quick to quote us a price and get us off the phone. If we took it, fine. If we didn’t, fine — not someone that really had the Nordstrom or Neiman Marcus type of service orientation,” Sun said. “We were willing to pay a little more. But we wanted one company to take care of it, and really feel like they were going to go over and above, and really be there for her when she needed it, and be there to talk to us whenever we needed to.”
They eventually hired an agency. And Sun remembered calling the grandmother early in the mornings to check on her.
“We’d get an answering machine,” she said. “That doesn’t really give you a warm and fuzzy feeling.”
‘Nailed the future’
The grandmother died days before Shelly and J.D. were married, and they quickly settled in to a young married life that wasn’t what they’d expected. J.D. was a stock trader, and Sun was working in the corporate world for a now-defunct private jet-leasing company. She said she was leaving the house every morning before her husband woke up and arriving home long after the stock markets closed.
Sun recalled her husband sitting her down for a talk.
“He said: ‘You know, Shel, I married you to spend time with you. I also wouldn’t change who you are. That wouldn’t be fair to you. I know you are very committed to your career. But it would be great if we could do something together.’ And so it made us start talking about what we could do together.”
The opportunity came sooner than they thought, when the company Sun worked for dissolved after Sept. 11, 2001. They started looking for a business opportunity, with the memory of their frustrating search for elder care fresh in their minds. They quickly settled on the idea of higher-end home care and discussed how to start a home health agency.
Gloria Jean Kvetko, a mentor of Sun and a member of BrightStar’s board of advisers, remembers Sun explaining the business model, along with the demographics that support it.
“I listened to her and told her: ‘You have nailed the future,'” said Kvetko, co-founder of Gloria Jean’s Coffees.
Kevin Smith, director of operations for the National Private Duty Association, an Indianapolis-based trade group representing home-care agencies, said membership in his organization has grown in the past five years to more than 1,400 from 800. And revenue growth in each of the past three years has been 9.7 percent, 16.6 percent and 17.5 percent, respectively, with expectations for continued growth, Smith said.
He cited census projections showing booming growth in the number of elderly Americans, as well as an AARP study that found 89 percent of seniors saying they want, as much as possible, to grow old at home.
“Those are two very strong indicators not only of an aging population, but of an aging population that wants to age in their homes as long as possible,” Smith said.
Health care overhaul, solidified with the re-election of President Barack Obama, also plays into the BrightStar business model, Sun said. The new law places a greater emphasis on quality of care and outcomes such as reduced hospitalization. She is optimistic that this could make it easier, under the new law, to earn referrals. (BrightStar’s type of service is not covered by Medicare but is by some private insurance.)
A key component to maintaining quality is hiring and keeping good people. Sun said BrightStar achieves this by paying slightly more than competitors and by finding a way to fill gaps in workers’ assignments.
By asking home-care workers, she learned that one of their biggest concerns is consistency. It is the nature of the business that, after a time, their elderly customers will die. In the standard model, the workers would then have to wait for a new customer in order to start drawing a check again. This could take weeks.
BrightStar also offers staffing services for a variety of businesses, from doctors’ offices to school districts to nursing homes. This means that home-care workers can be plugged into one of these settings while they are waiting for their next home-care placement.
With demographics pointing toward a squeezed workforce, this kind of benefit for employees takes on added significance. Sun said that asking the kind of questions that helped her build this staffing model was key to the early development of the company.
“Shelly has an extremely sharp brain,” Kvetko said. “But it’s not about ego. She’s not afraid to have people teach her things.”
Sun echoed that: “We wanted to do it right. But we didn’t know what we didn’t know. Both my husband and I were very humble. We would go out and ask people. … We would tell them that we don’t know what we’re doing yet but we want to do it well.”
Relishes a challenge
The business was a success almost from the start. … They opened two more locations, then made the decision to franchise in 2005. The startup investment for a BrightStar franchise ranges from $88,279 to $152,040, with an additional franchise fee of $47,500. According to Franchise Business Review’s 2012 Guide to Top Franchises, this is in the high range for home health care franchises.
Sun said people have asked her if she is worried about diluting the brand through franchising.
“I would argue I have almost as much control over my franchise locations as if those were employees, and maybe more so to protect the brand, because those franchisees have a couple hundred thousand dollars invested in their own location,” she said. “They’re leveraging their personal and professional reputation. They’re investing their money to follow the brand and live up to the brand standards.”
Not that every franchise has been a success. A New York-based BrightStar franchisee closed his doors in September 2011, later pleading guilty to not paying his workers and agreeing to pay back wages.
Matt Quandt, BrightStar senior marketing manager, said the case was isolated.
“Each office’s opportunities are unique, and we pride ourselves on the support, training and partnerships BrightStar offers to help our owners take advantage of those opportunities,” Quandt said.
Sun has never been a person who backs down from a challenge. The native of Knoxville, Tenn., and graduate of the University of Tennessee describes applying for her first job after college, where she majored in accounting.
Her would-be boss said he liked her Southern twang.
“He thought I’d sound cute being his assistant, and wouldn’t take no for an answer,” Sun said, noting that she was applying for an accounting job. “So I went back and got one of those tapes and tried to un-train my accent, and then I went back and applied to the same company and interviewed with a different person and got the job.
“So then on my first day of work, he was looking at me kind of funny,” she continued, speaking in a decidedly nondescript accent. “I went up to him and I said: ‘You wanted me to be your assistant, but I really am passionate about being an accountant. And I’ll be the best accountant you’ve ever seen.’ I said: ‘Are we going to have a problem?’ And he said: ‘Nope. We’re not going to have a problem.'”
Sun is a person clearly driven to succeed. But she said the birth of her twin sons, now 7, has forced her to try and corral her relentless drive. Taking more vacations — she said she typically takes six to 10 weeks a year — is key, because she said she’s not able to “turn it off” during the normal workweek. She also said she has learned to measure her success at striking a balance over longer chunks of time, not pressuring herself every day to be a great mother, wife and boss.
“I try to minimize the guilt,” she said. “I have to accept that, on any given day, I’ll be great at one, good at another and average at the third. But over the course of a month, I’ll be good enough at all three that I can be a great entrepreneur, a great wife and a great mother. I just can’t do it all on a daily basis.”
One thing that helps, at work at least, is the nature of the business. Sun remembers the early days, when she got to know all the customers of her fledgling company. One of their first customers was an elderly man, and Sun said she went to visit him when he was in hospice care, knowing he didn’t have long to live. When she entered the room and one of his sons told her that Sun was there, she said, he opened his eyes and held her hand.
“He said: ‘You promise you’ll always take care of my Ann,'” Sun recalled.
She said that when she returned to her office, there was a message from the son telling her the man had died.
“He said: ‘Dad was in so much pain, but you let him know that mom was going to be taken care of, and that he could go,'” Sun said. “It’s that moment that I think of often. That’s a moment that, on my worst days, I can think about.”
CEO and co-founder of BrightStar Care
Family: Married to J.D. Sun, BrightStar co-founder. They have twin sons.
Education: Bachelor of Science, majoring in accounting, from the University of Tennessee. Master of Science, University of Colorado.
Career: Before starting BrightStar in 2002, Sun was vice president of finance for Avolar, a subsidiary of United Airlines. She also held executive finance positions with CNA and Blue Cross Blue Shield. She is the author of “Grow Smart, Risk Less: A Low-Capital Path to Multiplying Your Business Through Franchising.”
Noted: Appeared on CBS reality TV show “Undercover Boss” in 2011. Was youngest International Franchise Association Entrepreneur of the Year, in 2009.
Interests: Ethnic food, especially Asian, and traveling with her family.
On her leadership style: “It’s so much easier and more rewarding to help get our people into seats on the bus where they can leverage their strength, versus putting all kinds of negative energy into trying to work on their weaknesses.”
Copyright © 2012, Chicago Tribune
Any reference to financial performance has been removed to ensure franchise regulatory compliance.