What follows are some of the principles Hession has found most important in raising his crop of entrepreneurs:
* FINDING ENTREPRENEURS
Look for Raw Material, Not Mystique
By the end of Key Nursing's second year, 1983, Matt Hession was in the intensive-care unit -- not as a patient, though he felt like he could have been, but as a constant substitute when his nurses didn't show. "I was working like a wild man," he recalls.
In return for his efforts, the company's vital signs were good, with healthy sales of roughly $400,000 and robust profits in the 10% range. And that was mostly serving hospitals within a 50-mile radius of tiny Thibodaux. What about Baton Rouge? Or Lafayette? Or -- the meanest market of all -- New Orleans? Hession was already working at least 80 hours a week, often only stopping to catch 3 hours' sleep on a rickety hospital cot. Sometimes he'd get so exhausted that he would come home at night and vomit. "He'd leave for work in the morning, and come back in about a week," remembers his wife, Carol.
How could he expect the same of anyone else? Where could he find such gluttons for punishment? What exactly did it take to succeed in this business, anyhow?
Answering the last question forced Hession to scrutinize his own experience.
He had started Key after spending three years at a similar staffing company. With no formal business training, he decided to strike out on his own. Not unlike the entrepreneurs he would later launch, Hession began with a meager $2,000 and a $20,000 line of credit, supplied by a local businessman. To keep overhead low, he worked out of his house.
Once launched, Hession found it mattered little that he was weak on accounting or couldn't analyze financials. For that, he could take classes or find others to help him. What they couldn't impart were the things he had learned while working as a nursing director.
He knew that hospitals were feeling the heat because of changes in federal reimbursement laws. Above all, hospital administrators feared having to close a profit center such as an intensive-care unit because they couldn't find nurses. Cozying up to them, Hession whispered the exact words they wanted to hear: "I can make it so you'll never have to worry about that again." Then came the capper: "I guarantee it." To set his agency apart from the competition, Hession guaranteed that a nurse would show up. The substitute was often Hession himself.
He also knew where to find the nurses. At the start of his second year, Hession landed a contract to staff an intensive-care unit at a hospital managed by Hospital Corp. of America. Eager to make the right impression, he went out and recruited the nurses immediately -- only to have them pull out 30 days before the contract began.
With his expertise, Hession knew exactly where he had the best chance of finding underpaid, ready-to-relocate nurses. He got in his tiny plane, a Cessna 172, and piloted himself to Jackson, Miss. There, he rented a room in a hotel strategically situated near three hospitals. He went to a local radio station and plunked down $2,000 on ads. He had the nurses lined up within two days.
It was that kind of determination -- "the ability to be completely and totally committed," as Hession puts it -- that kept Key alive.
And that was what he wanted in a manager; the ability to be unstoppable. That came not from being educated in business, nor even from risking money. ("If risking money was what set entrepreneurs apart, everybody in Las Vegas would be an entrepreneur," he notes.) It came from having what he calls the "basic raw material" of determination, combined with practical experience as a nursing director. "I stay away from mystique," says Hession. Forget the stereotypical entrepreneurial profile -- the charismatic, inspirational leader. He was after the basics: have they managed people? Have they shown some responsibility with money? Can they work hard?
By 1984 he had his eyes on someone who met that composite perfectly.
Hession had met William Borne while Borne was director of nursing at a small 35-bed hospital. Now, Borne was working as a Key nurse, but he was always proposing business ideas to Hession. One week it was car alarms. The next, a liquid-diet product.
One morning, Hession approached Borne in a hospital cafeteria. "Listen, Bill," he said, "I have good news. We are going to form a corporation." Borne looked somewhat puzzled. But when he heard the next sentence, his face lit up.
"And," Hession added, " you are going to run it."
* SETTING THEM UP
Give Equity and Operating Control
For a brief time, Hession had considered franchising the Key Nursing concept. Refused equity by his previous employer, he knew how important it was.
But he was equally committed to finding people who had the qualifications he wanted. And if he set up a standard franchising agreement, he would have to find people who could get their hands on some serious money. Getting started, losses from operations could easily run as high as $50,000 the first year, not to mention the working capital they would need. Add to that a franchise fee, and Hession figured he'd have to disregard anyone without access to about $100,000.
So much for emphasizing experience. How likely was it that a nursing director would have $100,000 stashed somewhere? Physicians might be interested, but, notes Hession, "they would hire somebody else to handle the franchise, and who knows who that would be." Hession was not willing to make that kind of trade-off. "I wanted to be able to look for the best qualified person possible," he says. That person, like Hession in 1982, probably didn't even have $2,000 to start the business.
