I believe that people should follow their dreams when it comes to a business or career, but they need to do it smartly instead of blindly leaping into situations. Developing a skill in weighing risk vs. gain is very important in knowing which risks are worth taking.

Everyone new in business is going to make mistakes along the way, and that's just part of the learning process. What I'm against is making mistakes when you have the resources and ability to make a calculated decision. There's a difference in leaping and knowing there's solid ground across a divide and leaping without knowing what awaits you.

Here are some things about risk vs. gain that you need to consider when you're first starting out:

1) Not all risks are based in finances.

When we usually think of risk in a business sense, most people automatically think of money. You can however risk other things as well such as your time, your energy, your reputation, your integrity, and other aspects of your life. These need to be factored in as well. For example, expanding a business too quickly may increase your income but may harm your family life if you have to move between different locations.

There's a positive side to this as well in that these other factors have value. The biggest example I can think of is I personally want to be at home when my husband and I decide to have kids. By the time that comes I will likely be making a 6-figure income between a job and our business. In that situation, I would risk a temporary decrease in income in exchange for the gain of more valuable time.

When you have a dream, you're going to risk at times. That's just part of success. You can't be afraid of failure, but don't go off and do something you know could do you more harm than good either.

2) Knowledge and experience will decrease your chances of a foolish risk.

If you're going to take a major risk in life with anything, you need to take the time to gather as much information as you can prior to making a decision. The worst situation you can find yourself in is making a decision on impulse just because the deal is "too good to pass up." There have been times I passed up some opportunities because I knew my own experience had not gotten to where it needed to be to take the deal with confidence. It's hard at the time, but you'll likely thank yourself later.

I'll give you an example of when I first started my Amazon business. In the beginning, I bought every used book that I thought looked valuable in relation to its price, which wasn't always the case. After a few times of spending $3-4 on certain books worth only a penny online, I decided I would research batches of used books by writing down their ISBNs and returning for the good deals on my second trip. My profits nearly doubled. As I gained experience however, I figured out certain types of books that it was usually okay to take risks with if making a second trip was not possible.

3) Get advice from the right people.

Find a good mentor who cares about you enough to tell you when you're likely making a mistake. This needs to be someone who knows about business and has a balanced point-of-view, as sometimes we all have people in our lives that view all of our risks as mainly good or bad.

4) Explore the "Worst-Case-Scenario."

Sometimes when we have an idea, we only look at what would happen if everything goes exactly right. In mentally taking the situation into the "what could go wrong" territory (with the right attitude), you can often think of solutions to obstacles before they even come up. This isn't to discourage you on the idea but to make you think.

I think this is very important when it comes to debt in a business. I've known people to borrow a lot of money trying to grow too quickly, and it sinks their businesses. If you do this, you have to consider if you have the ability to clean up a potential mess or if growing more steady through cash flowing it is right for you.

5) When it comes to major decisions, sleep on them a little.

There have been ideas that I've had that after some thought I've decided against, just because something occurs to me within 24-48 hours of when I was originally going to make the decision on impulse. If it's not time-sensitive, there's no reason to rush into anything.

I hope these tips have been helpful to you. Good luck and take care!