The subject of this master’s thesis is family entrepreneurship, which is considered one of the most represented forms of entrepreneurship, and therefore represents an important element in Croatia’s economy. The focus is on family entrepreneurship, a development area which studies entrepreneurial behavior of families, family members and family businesses, taking into account possible interaction among them. Family businesses are most often founded by individuals and their families after a job loss or to create something new or something of their own. In many economies, there has been a sharp increase in the rate of entrepreneurship at all levels of development. The reason can be found in the recent challenges in the global economy that had led to the downsizing of large traditional organizations, pushing many individuals to look for new employment or career change opportunities. Entrepreneurial behaviors are therefore of vital importance, given the current economic crisis companies are faced with and given the fact that they can be especially useful for companies in competitive environments. Managing a family business can be hard. Roughly 70% of family businesses fail or are sold before the next generation can take over the business. However, if the right steps are taken, a family business can grow and flourish into an extremely successful entity. Running a family business is a unique opportunity that only a few are lucky enough to experience in life. From conflicts of interest to restrictions of new ideas, family businesses face many challenges. The thesis will use a combination of different methods that will ensure accuracy and security; a descriptive method for detailed descriptions, classification method which is a condition for the methods of analysis and synthesis, and the method of induction for the conclusion. The objective of the thesis is to highlight the importance of this type of entrepreneurship in Croatia’s economy and explain its contribution to the overall economy and market. To achieve the objectives of the thesis,secondary sources of information based on scientific and professional literature will be used.