The biggest mistake I ever made was buying 1-800-FLOWERS. When I was examining the company, in 1983, I didn't know how to do "due diligence"; what I did was more like due negligence! When I agreed to buy the company -- which at that point was a defunct business with its phone number as its only real asset -- I also agreed to assume its debt. I was very enthusiastic about what I could build around that name and phone number, and I assumed the debt couldn't be all that bad, because the company didn't even have any employees at that point.

Call it naï veté , but I had no idea how big the liabilities would be. After I bought the company, it took me the better part of six to nine months to quantify those liabilities -- and they were a staggering $7 million. Most of the debt was owed to florists who had done business with 1-800-FLOWERS under its previous ownership. People advised me to just give up and file for bankruptcy, but that was not an option for me. Morally, I think bankruptcy is wrong, and I knew that our bankruptcy would have had a severe impact on florists all across the country. Instead, I said: "Look, we've made a mistake. Now, to pay off our debt, we'll just have to expand our plans, play on a bigger stage, and be successful sooner."

So we leveraged every asset we could to keep creditors at bay and worked off our good credit reputation from my past business. It took us four or five years to crawl out of that hole, but we did it.

In hindsight, when I bought the company, I was operating by the seat of my pants, and I made a big mistake. In the entrepreneurial community, we celebrate "seat-of-the-pants" entrepreneurs, and that gives you the mistaken notion that you can do everything by gut instinct. But that's because you see only the success stories about seat-of-the-pants entrepreneurs. There are a lot of failure stories, too.

Jim McCann is the president of 1-800-FLOWERS, based in Westbury, N.Y. The company had 1997 sales of $300 million.