Small and medium sized enterprises have a significant impact on the economy of the Republic of Croatia, reflecting both social and economic relationships. Although small and medium enterprises are a key factor in the Croatian economy, they still face certain obstacles in their operations. However, with the help of government support, they manage to remain in the market. In addition to existing business challenges, small and medium enterprises have encountered issues due to the COVID-19 pandemic, a novel respiratory illness that spread rapidly worldwide. Due to various measures and restrictions, businesses had to deal with reduced workforce, rising costs of raw materials and supplies, liquidity problems, and difficulties with customer and supplier relations. The government responded swiftly by providing a range of measures and support packages to help small and medium enterprises successfully navigate the crisis. This thesis aims to present the state of small and medium enterprises, their impact on the economic situation in the Republic of Croatia, and their challenges in the market brought about by the COVID-19 pandemic. It also examines the impact of the COVID-19 pandemic using the example of Krka National Park, highlighting both the negative and positive effects it has caused