BrightStar Care client and a BrightStar Care registered nurse
BrightStar Care
Driving growth in the care economy is aging-in-place, one of four sub-sectors with significant growth potential, according to The Investor’s Guide to the Care Economy: Four Dynamic Areas of Growth. The aging-in-place market totals $151 billion and, as of 2019, was expected to grow 13% annually.
Shelly Sun, CEO and founder of BrightStar Care, saw the potential for the aging-in-place sector for seniors when she was searching for care for her grandmother. It was difficult to find one company that provided medical and non-medical care.
“I thought that it was something that many other families needed,” said Sun. “About one year after going through the experience myself, I started Brightstar Care to do just that in 2002.” Over the next 20 years, Sun used the franchising model to grow exponentially. She shares how she navigated the challenges that high-potential companies face on the road to success.
An accountant by training, she led a team of 300 people at CNA Insurance. She wanted to use these skills to start a business in an area that used her business skills and one she was passionate about. She wanted to make a difference in people’s lives.
Sun knew from first-hand experience how difficult it was to find a company that provided a high-quality continuum of both home care and medical care. She spent time interviewing caregivers. They wanted to do home care but were concerned about the unpredictable nature of this type of work. Home care isn’t needed when seniors go into the hospital, when family members are in town, or when they pass away. It is a low-wage job in which workers often live paycheck to paycheck.
“How could you let them do what is their calling—provide compassionate care—but also allow them to have some predictability and the ability to provide for their own family?” said Sun. “Combining staffing and home care allowed us to do that.”
Like many young companies, there were times when managing cash flow was challenging. “There were times when I had to put payroll on a credit card,” said Sun. Back then, this was the only solution when your business was too young to have established a line of credit with a bank.
When you’re confident you’ll get paid within the credit card billing cycle, it’s a quick no-interest source of funding. “If I weren’t willing to take that risk, then we wouldn’t have grown,” said Sun. “I believed in what we were doing, and I believed in the creditworthiness of the client that I had double-checked.”
For young companies that haven’t established a line of credit with a bank, sometimes the interest payments credit cards charge can be worth the cost for a quick source of financing. Over the past few years companies like Amazon, American Express, HoneyBook, PayPal, QuickBooks, Square, and Stripe, started offering their customers financing options that are worth considering as well. These options didn’t exist when Sun was starting BrightStar. You might also consider invoice factoring. Community Development Financial Institutions (CDFIs) are increasingly providing lines of credit.
Spurring exponential growth was Sun’s decision to grow using the franchise model. Franchising can be a pathway to rapid growth for replicatable unique businesses. Franchising allowed BrightStar to have a local presence with scalability and maintain consistency from location to location.
In late 2005, early 2006, Sun began franchising. “We’ve grown from a few locations to 365 locations, a couple of million dollars of revenue to nearly $640 million of revenue, and caring for a handful of clients to 20,000 in any given week,” said Sun.
Her success has led Sun to endow a franchise program at her alma mater, the University of Tennessee, in its Haslam School of Business, to implement a franchising program. “Franchising has been a great way for the franchisees as well as my corporate team to have growth and for me to see a brand get a much larger scope and scale,” said Sun. “We have set aside scholarships for minorities, women, and members of the LGBTQ community to make sure that they can access the program free of charge.”
Steven Beagelman, a Forbes contributor, predicts 2022 will be the year of the franchise growth. Being a franchisee alleviates some of the fears and the unknowns of starting a new business from scratch.
As BrightStar moved from launch to scaling, having the right talent to grow was challenging. “I went through a stage where I hired talent that I could afford versus the talent that I needed,” said Sun. “Now I’m willing to overpay for what I need today because it will help me get to where I want to go tomorrow.” Hiring people that could grow with the company was key to the company’s success.
Another obstacle to the aging-in-place sector is that laws around reimbursement do not necessarily favor home-care delivery. Advocating for legislation is critical, not just for BrightStar. Reimbursement for home-care services is improving, and the pandemic has helped speed up change, but more work needs to be done. “We joined a coalition aimed at influencing current federal and state policies to help the home become an accredited clinical-care site,” said Sun. “There were some emergency orders to allow things to be done in the home.” The coalition is advocating to allow policies put in place on an emergency basis to become policy.
The key to passing legislation is showing that home care improves outcomes at a lower cost. With the help of Avalere Health, a leading healthcare analytics firm, BrightStar documented that personal care services—medication management, meal preparation, personal care assistance, and patient education—have a positive impact on overall health, leading, in turn, to a reduction in healthcare costs and value creation for payers.
The study found that the total cost of care for BrightStar clients was nearly $30,000 lower when compared to a similar group of Medicare beneficiaries. The impact was concentrated on a specific population of patients with one of 30 chronic conditions, including multiple sclerosis, lung cancer, and seizure disorders.
How are you navigating challenges on the road to success?
