Entrepreneurship has an enormous impact on an economy of a state. It is based on personal freedom, right of inheritance, right of ownership, freedom of entrepreneurship and market freedom. Entrepreneurship is a business venture that generates profit and it involves certain risks. When an entrepreneur establishes a company, it is mostly important for an entrepreneur to form a business strategy and, along with it, define the vision, mission and goals. For this purpose, possible risks are assessed and the market is investigated. Reducing risks and achieving goals is facilitated by the implementation of all functions of entrepreneurship, which include planning, organizing, leading, managing human resources and controlling. Based on the size of the company, entrepreneurs are classified as small, medium and large.Small and medium enterprises significantly influence the economic growth and development of the Republic of Croatia by creating new jobs and reducing the number of unemployed persons, increasing the competitiveness of the economy with their innovative activities and adapting more easily and quickly to the environmental changes. Small and medium-sized enterprises would make a more significant impact on economic growth and development ifthere were to be implemented important structural reforms.