THE burden of student debt has failed to crush one young graduate’s entrepreneurial spirit, but it was a close call.

Last November Dan Smith was wrestling with a dilemma: he had a great idea for a business, but was it madness to put it into action when he had no assets, little income and debts of nearly £20,000? In need of a “reality check”, he wrote to us for a Money MoT.

Dan was concerned that if he waited a couple of years until he was out of the red, he would miss the gap in the sports-tour market that he and a friend, Sam Jennings, had identified. Dan, 24, says: “How does Tony Blair expect the economy to be dynamic when he saddles students with so much debt? There’s no real help out there specifically for graduate entrepreneurs.”

Despite his weak financial position, Dan decided to forgo the chance of a salaried job to waste no time in getting the business off the ground. During six months of painstaking preparation, he worked part-time at a college for people with special needs.

A year on, Dan and Sam’s company, Tours4, which runs sports tours in the UK and Europe, as well as days and nights out for student groups, is as successful as they dared to wish. Sam, also 24, recently gave up his job with a property company to join Tours4 full-time. In May they ran their first rugby tour and more than a dozen are booked, including an ice-cricket tour to Estonia.

Dan says: “The Money MoT helped me to focus on working smart, not just hard. It prompted me to get a part-time job to stop me getting into more debt instead of going full-time on the business straight away. We took on board all the advice.”

The pair, who both studied languages, met during a year in France. Dan saw Sam, who was wearing a rugby shirt, and thought: “That’s my kind of person.” They got talking and found that they were both eager to make a living from sport and travel, their two passions, and the idea for Tours4 took root.

Between them, they speak five European languages. Another strong point, Dan says, is a flair for management and organisation. Research showed them that there was room for the personal touch in the sports-tour market, and for more affordable prices. “We tailor-make each tour,” Dan says. They also take care to insure their tours “to the hilt”.

Dan lives in Kent and Sam is in Manchester, which enables them to deal personally with clients in both the North and the South.

Dan took a course with Business Link — “a brilliant process” — where he mastered the less exciting technical aspects of starting a company. He says: “Business Link Kent also provided a substantial website development grant.”

A significant step was to trademark Tours4 so that the brand can be applied to different types of tours, such as Tours4 Sport and Tours4 Students, as the company grows.

HSBC turned out to be the most receptive bank. Dan says: “It’s great to have a big bank behind you. HSBC had the best rates, the best service and it believed in our idea.”

It is a sign of the times that Dan and Sam would have found it almost impossible to realise their ambition without family support. They both live and work from their parents’ homes to cut costs, and both sets of parents have invested equally in their sons’ venture.