This paper explores the small business sector, i.e. small entrepreneurship of the Republic of Croatia. Entrepreneurship is a developing power of each economy and it is a foundation of the success of every individual country. The enterprise constantly seeks something new and it is never satisfied with the existing. There is an opinion in the modern entrepreneurship that what is good today- tomorrow is not. And that's why entrepreneurship is considered dynamic and demanding process. A successful entrepreneur is one who seeks better, who has ideas, who is not settling with an existing conditions and always searches for solutions to social progress. When starting any new business and joining enterprise, there is always a risk. Entrepreneurs are turning a small idea into a big business, using their own, but also, other people's monetary and commodity funds. A successful entrepreneur is one who turns an idea into business. Small and medium-sized enterprises represent almost the majority of all registered enterprises. They are the engines of development and innovation. Small entrepreneurs make their dreams come true through the establishment of their own craft or trade societies. Because of small businesses the employment is increasing, unemployment is reducing, contributing to the increase of the competition of economy and, therefore, are of the utmost importance. The basic aim of the company is to achieve the revenues that will be larger than the total costs of the operations, i.e., profit. Profit is for an entrepreneur a basic motive and aim for which he decided to deal with risky entrepreneurial activities. Even though they are important for the growth and development of the overall economy, they are faced with numerous problems, among which the problems in the financial system stand out due to which many end up in bankruptcy.