NEW YORK (Reuters) - In a conservative suit and tie, Jim McCann does not look like a hippie. But the founder of 1-800-Flowers is using flower power to push a powerful social agenda.
In June, McCann transitioned to the role of chairman of the company he founded 40 years ago, passing along the chief executive officer title to his brother Chris. While McCann is still involved in the company’s operations and strategy, he is using his extra time to focus on several charities and broaden his business interests.
McCann, 64, spoke to Reuters for our “Life Lessons” series, talking about the challenges of raising kids, working with family and philanthropy.
Q: What is the secret to a successful partnership among family members?
A: It’s a privilege to work with family. I’m the oldest of five. My brother Chris, who just became CEO of 1-800-Flowers, is the youngest. We have two sisters and a brother in between. We have all worked in the business. My mother, when she was alive, ran payroll. My dad was a painting contractor, but if he wanted to see family at holiday time, he had to come to work with us.
I left the house when my baby brother was six years old, so we were never rivals. Working together is an ideal situation.
Q. Your other brother Kevin is developmentally disabled. What kind of money challenges has that presented to your family?
A. This is a constituency without a voice. They experience an 80 percent unemployment rate among those who are able to work. It’s a sin. It’s a shame. There isn’t a parent or responsible sibling who does not say: “What happens to my special person after I’m gone?”
It was the dark ages when my parents were still alive. They would travel for hours every weekend to visit Kevin.
We’ve been fortunate that it hasn’t been tough economically for us. Kevin is the centerpiece of our family, and now he lives in a group home, which is much closer to family, on Long Island and works at Smile Farms, a nonprofit we created.
Q: You founded your company in the 1970s. Did you make any money mistakes along the way?
A: The biggest one was buying 1-800-Flowers after I owned about 20 flower shops. I didn’t do my due diligence. I was too much of a smart-alec to hire accountants, lawyers and banks. I put up $2 million to buy it, and I had assumed about $7 million in debt I didn’t know about. I started selling stores off because I needed capital to feed this beast. In the next five years, I paid off all that debt. We were doing creative and scrappy things because we had no money.
Q: How do you invest your own money?
A: I think the entrepreneurial spirit is the rocket fuel in our tank as a country, as an economy.
I made an investment in a company called CityMD, which operates urgent care centers. It’s the beautiful intersection of people with intention of doing good and capitalism.
Aside from my investment in my own company, my investment strategy is a barbell approach: I own a lot of municipal bonds and alternative investments. I only invest in companies like IGT and Scotts Miracle-Grow, which are steady dividend payers, as well as those whose boards I sit on, such as Willis Towers Watson, where I am now chairman.
Q: How important is it to give to causes that are near and dear to your heart?
A: I’m selfish. I want to help the people who work for us, and the people who are important to me. We started Smile Farms because everyone feels better when they have a job. We employ developmentally disabled people in our greenhouses to grow flowers and plants in a workshop environment. It’s local, it’s social, and it’s all about helping people who otherwise would not have a job.
Our family is very supportive of Independent Group Home Living, which operates more than 50 independent group homes on Long Island. I am also on the board of John Jay College, which is my alma mater.
Q: What money lessons have you passed along to your children?
A: I haven’t had a mortgage since our first house. Anything after that, I paid cash for. Two of my three kids have purchased homes now.
They didn’t stretch beyond their means. They each bought a house comparable to what their peers were buying. I set up trusts and let them borrow against the trust for half of a down payment. They had to prove to me they could handle the mortgages on their income.
The biggest lesson? Live below your means. Life is simpler and more fulfilling when you do not show off.
Editing by Beth Pinsker and Alan Crosby
Our Standards: The Thomson Reuters Trust Principles.