Family entrepreneurship is a specific form of business in which family members are connected and have a common economic goal, both for the family and for the enterprise. This type of business has many advantages such as trust, love, same desires and goals, but also a lot of disadvantages such as a greater presence of emotion than reason. For family businesses, it is important to set clear rules of conduct so that there are no problems that may cause business difficulties. In situations where everything works, family businesses have a distinct advantage and power over other companies and are able to survive for several centuries. In Croatia, family businesses are not defined and are not recognized as such, but that should change and there should be more understanding of their importance, because family businesses are the main drivers of the economy of any country. The aim of this paper is to explain the functioning of a family business, to identify the problems that occur with family businesses in the Republic of Croatia and to find a solution to problems related to family businesses and their functioning in the Republic of Croatia. As a result of this work, the assumptions that should be adopted to enable the growth and development of family businesses were created.