Martha Stewart is smart. There's no question about that. But perhaps her smartest move ever was to take the plunge and enter prison last fall so that she could "be out by the spring."

That decision closes out a disastrous segment of her life and jumpstarts her future. While the ImClone stigma will always lurk in the background, her brilliant proactive approach to getting past it is what makes Martha, well, Martha.

At her base, Martha is a smart woman business owner.  And she's in good company. According to the Center for Women's Business Research in Washington, DC, Martha is one of 15.6 million women business owners in the US.

And like Martha, most women business owners have at least one nightmare story to tell. To reach business success, they've all overcome tough situations and recovered from bad decisions. With the hope that other women might learn from their mistakes, three women who own multimillion dollar businesses agreed to share with us the story of their most disastrous mistake in building a business.

Judy Rosenberg of Boston

Rosie's Bakery is a Boston staple. In fact, Judy Rosenberg's bakery chain has been enshrined in the Boston Magazine's Hall of Fame. But getting there has been a series of ups and downs, one of which was almost fatal.

Rosie's was started on a whim on Valentine's Day, 1974. The first few months, Judy worked from her home kitchen, dragging hundred-pound bags of flour up to her second-floor apartment. But before long, her success grew and she was opening multiple locations. Both her name and that of the bakery was recognized throughout the city. She was rocking and rolling.

Then Judy was bitten by the overconfidence bug. With visions of a Rosie's in every mall in America, she picked out her next location, a spot right across from a food court in a high-end mall.

Confident in her wonderful new store, Judy refused to scrimp on anything. She sunk $300,000 into the project and then, on opening day, watched in despair as mall-goers passed right on by. It turned out that the food court customers just weren't interested in the high-end baked goods that Judy was so sure they'd buy. From day one, it was clear that the store was a disastrous mistake and Judy bailed out as soon as she could.

Of course the failure set the business back, but far worse, it shattered Judy's confidence. And she had no one to blame but herself; she had gone on instinct and passion rather than business smarts. Judy, the woman who previously sat at the top of the Boston business world, found herself spiraling downward. She bottomed out when both her operations manager and head baker were lured away to the competition. Judy truly thought her life was over.

In the midst of her personal angst, Judy discovered the Women's President Organization, a nonprofit organization for women who run multimillion dollar businesses. Judy began attending monthly meetings with peer advisory groups; she connected personally with the other women in her group. Looking through the eyes of these women reframed Judy's view of her situation, resulting in an epiphany. She learned that her great mistake was not a failure, but just another step in the learning process all business owners experience.

Denise Haney of Phoenix

Denise Haney founded Newport Furnishing in 1998 with a goal of redefining the way homeowners buy furniture. She wanted to provide upscale gallery furniture in an affordable way by selling it through a warehouse showroom. And over the past seven years, she's done amazingly well. Headquartered in Phoenix, Newport currently has locations in eleven US cities.

But Newport's growth didn't happen by accident. And it didn't happen without error. Denise winces when she thinks of the major mistake that almost upended Newport during their second year of business. Up to that point, Denise, and her husband, Chuck, had focused all of their energy on their Phoenix showroom, not even considering additional locations. Out of the blue, they were approached about expanding into another city and they let their enthusiasm--and the vision of dollar signs--lead them into a bad decision.

Excited about the opportunity to earn revenue from a new location with minimal effort, Denise and Chuck quickly developed a licensed dealership agreement that enabled the new location to use the Newport Furnishings name and run their business autonomously, in return for a percentage of sales. But a few months into the deal, Denise began to hear tales from vendors that this location was trying to short cut the relationship by going directly to the vendors behind her back. Gravely worried, Denise realized that she had placed too much trust in the owners of this location and this trust had been betrayed.

Although Denise was seriously concerned about this situation from a business perspective, it took an even greater psychological toll on her. She was taken aback that someone she had trusted and planned to work with for many years, had taken advantage of her. Truly distressed, she vowed never to let such a thing happen again.

And she's held to that vow. As a result of this negative experience, Denise responded two ways. First, she became aware of a huge opportunity for national expansion; she capitalized on this opportunity by opening eleven new locations in the past five years. And, to make this expansion work, Newport Furnishings developed a unique joint venture partnership agreement. With strict controls that create a partnership that is fair for all.

Denise is confident this new model makes sense. "Right now, we're scheduled to open eight more showrooms by the end of the year. And we feel great about every one of them!"

Adrian Guglielmo of New York

At a time when many businesses are trying to "deal" with disabled employees, Adrian Guglielmo has built her whole business around them. She has developed a totally new concept, a for-profit business staffed by the disabled. Her creative agency, Diversity Partners, focuses on promotions for national corporations seeking to market to individuals with disabilities.

While Diversity Partners started out strong, Adrian made a classic mistake when her company reached the $150,000 mark. She bid on a multi-million dollar project for Johnson & Johnson that was way outside of her company's range. A flush of embarrassment still flows over Adrian's face every time she thinks about it. She killed herself to produce a 200-page proposal that she delivered with 290 typos. She knows now that she had no business even bidding on that job and her dismal proposal was proof of that.

After that fiasco, Adrian never expected to hear from J&J again, but her stubborn streak wouldn't let her give up. Then, miraculously, after maintaining contact for over a year, J&J gave her the opportunity to bid on a small $7,500 project, which she won and executed flawlessly. That project allowed her to get her foot in the door, leading to continuously larger contracts, which culminated in her production of an entire catalog of J&J products for the disabled.

From this experience, Adrian learned to go after projects that are reasonable for the size of her company and work her way up from there. And as her company has grown, she's tackled larger and larger projects. Over the years, Adrian has learned to chase dreams rather than pipedreams. And those dreams have paid off-big time. Besides Johnson & Johnson, Diversity Partners' client list runs the gamut from Avis to UPS, from Microsoft to McDonalds, from Avon to the New York City Marathon.

As she continues to provide more and more jobs for disabled employees, Adrian looks to a new goal. Her ultimate dream is to stand on the floor of NASDAQ and announce in sign language, the initial public offering of the first company run by and for people with disabilities. Knowing Adrian's passion and tenacity, it is just a matter of time. So, like Martha, each of these women has lived through a nightmare experience. But, also like Martha, these women are smart. They have grown through the lessons they learned during the worst season of their lives. And they've awakened, like Martha, to move forward in the spring.

This Month's Business Growth Book

What Queen Esther Knew: Business Strategies from a Biblical Sage by Connie Glaser and Barbara Smalley - So you think you started out at the bottom? Esther was an orphaned Jewish girl who won a beauty contest and went on to become most powerful woman in Persia. Amazingly, Glaser and Smalley have re-crafted this bible story to contain the ingredients every woman entrepreneur needs to succeed in today's business world today. Esther's development as a leader illuminates important strategies for success that you can relate to and learn from. You'll want to give a copy of this easy-reading but impact-making book to all of your women friends.

Copyright 2005 by Mary Cantando. All rights reserved.

Mary welcomes your comments, complaints, or compliments.

Contact her at www.WomanBusinessOwner.com