What is my next step? To business, or not to business..

A rule of thumb I've often seen quoted is that you should ALWAYS have 6 months living expenses saved up before undertaking any new debt. This makes sense to me, so i think you should figure what 6 mos expenses is to you, accumulate that in a high-interest online savings account, and once you have that, consider getting the $100,000 loan you'll need to start your business.

I have my own business in a multimedia field. To get into it, I reduced my expenses (no debt, etc.), got a job in the field, started freelancing on the side, and then went on my own when I had a good pile of savings. I didn't take out any loans because I don't like debt of any kind. Instead, I've been reinvesting profits in the business to grow it slowly. I'm not saying that's the only way to do it, and I realize some businesses really do need a cash influx at first. I agree that at a minimum you need 6 months of living expenses. I also suspect that $500k profit in the first year is optimistic. Most importantly, you need to make sure that the execution of your idea is what's unique about it. Someone will copy what you're doing, so you have to do it in a way that can't be copied (in other words, have a unique & strong brand). This could buy you all sorts of time in which I'd suggest you aggressively pay down your debt. This will put you in a safer financial position and make it more likely that you'll get financing. If you're really eager to get going now, you might (carefully!) find yourself a more experienced partner. For advice, you might see if you can get help from http://www.recourses.com/overview, which advises small advertising & interactive firms. You should also check your local Small Business Development Center (SBDC), which will be able to tell you about grants, incorporation, and such. The SBDC is free; I think it's part of the federal Small Business Administration. I've also talked with SCORE volunteers, another free service, and got good encouragement from them. You might Google "SCORE" and your city. There are many online discussion forums for people who are starting businesses, but the ones I've seen have bad advice mixed in with the good, since it's basically the blind leading the blind. I've learned a lot more by reading stories of other small businesses in Inc. magazine.

I think the smartest thing for you to do financially right now is to finish your degree, pay down your debt, and build up some savings. As you said, that will take some time (possibly years), but starting your own business is a big risk, and it doesn't sound like your financial situation can handle that big of a risk right now. You're still young, and it sounds like you are on a healthy career path already with the things that you are currently doing, so I don't think there's any need to rush into starting a business. I obviously don't know your particular situation, but I hear the "I just need $100k, and I can turn that into $500k in a year" thing all the time. Nearly everyone who starts a business thinks it will have massive profits right away, but in reality must small businesses fail and even successful businesses are often unprofitable for the first few years. Investors know this, which is why they probably aren't going to want to give you any money. Also, most people think that the important part starting a business is the idea or business plan, but in most cases it's actually the execution and hard work that goes into it that makes or breaks the business. You can have a great idea for a product or service, but if you don't have good enough marketing, for example, nobody is going to buy it. If you're going to try to run the company without much help, you need to be able to do all of those things that make a business successful.

On the other hand ... you sound pretty level-headed, cautious and realistic. I can't tell you how many ideas I've had that I didn't pursue, and found they were realized by someone else in a way that was close enough to mine to make it hurt. As a marketing advisor to numerous start ups, I can tell you in my experience, it's about 50/50 -- experienced team vs. a guy with an idea who will not be denied. Keep your day job/s, but be relentless in learning how to make your thing happen fast while minimizing risk. Don't let it take years while you pay down debt, go to school -- if your gut is telling you someone else could do it at any moment, I'd think long and hard before ignoring it. Good luck.

It is a very large risk, I doubt you can seek financing from any bank. If you know someone in the advertising industry who you trust, that may be the best way to obtain funding. Someone who has an intimate knowledge of the industry and can discern from your business plan what the actual risks and rewards are. To be blunt, nothing turns on the bullshit detector than claims like "5x on your original investment in a year." That's crazy. That doesn't mean it won't work, but you're not going to find a random stranger (e.g., the market) willing to help you. Do what everyone else with an idea does: go to their friends and family. Really your only source of financing will most likely come from them. They are also the type of people foolish enough to go for such an investment. I say this as a good thing from your perspective, because without them you wouldn't stand a chance. Good luck but realize that these types of ventures have extraordinarily high failure rates. Yes, the returns are amazing, but saying that you'll have any profit at all, let alone a windfall of 500k within a year, is way out of whack. Perhaps you have clients lined up already with good credit lines, but if you have to sell and market a product without clients knocking on your door to deliver it -- you have a long road to go. Well, I've always been under the impression when one has debt it isn't wise to rack up more debt. This is not necessarily true. There is good debt and bad debt, good savings and bad savings. If I can get an intrafamily loan for $100,000 at 1.85% (or whatever it is hovering around) and put it even in an incredibly conservative investment vehicle, I've come out on top. But that is with fairly known risk profiles (long tails, yadda yadda yadda), where this is as speculative as you can get. At the end of the $100,000 in a service company, what do you get? A product with literally no-intrinsic value? You can't liquidate marketing ideas like you can plant and equpiment.

I agree with burnmp3s. Starting a business is risky. Even if you have a great idea and a great plan, there's high risk of failure. The fact that there isn't another business that's doing the same thing means its riskier-- you're trying to create or develop a new market. You may be able to find some resources with the SBA (http://www.sba.gov/), but I strongly recommend getting at least some savings before looking for loans. You'll have a hard time getting other people to put their money on the line for your business if you don't have any at risk.

You sound confident but realize that there is a huge difference between $500K in profits and $500K in earnings. Saying $500K in profits will make you sound like a rube to investors (This would usually indicate somewhere in the millions in revenues)

If you're keen on being self-employed, either with this idea or another one, I'm not convinced that there's a reason for you to finish your degree. A degree in communications doesn't teach you how to run a communications business, it just makes you more attractive to employers. If your life's goal is self-employment, you need business management skills, not communications theory. However, if this idea is your only idea and isn't part of a larger plan to be self-employed, then your degree might be useful to get you a job if you decide to bail on the business. When I was your age I already knew I couldn't be an employee and I started planning for my freedom. Starting a business is a lifestyle choice. It's nothing like having a job, and the usual recommendations (get a degree! polish your resume!) are irrelevant. Re the common belief that new businesses don't make a profit in their first year: This depends on the business type. My business was profitable from the beginning because it was 100% services and my marketing expenses at the time were just web site design and business cards. Of course, other types of businesses will have far higher expenses and might not see profits for years. And I would be skeptical of $500k in profits, as I said earlier.

As someone running a small business, I found http://www.amazon.com/exec/obidos/ASIN/0887309593/metafilter-20/ref=nosim/ to be a very valuable read. It details what goes wrong with many small businesses, and really resonated with me.