Following the analysis of the institutional framework for the development of small and medium entrepreneurship in tourism, as well as the analysis of major features of the SME business in tourism, the document specifies its key development factors, defines its major strengths, weaknesses, opportunities and threats and analyses the possibility of its development by means of funding through EU funds/programs. On this basis, the document defines the vision and strategic goals of the SME development in tourism as well as the key program areas and their stakeholders, policy instruments and/or activities in order to raise funds from available EU programs and improve the SME activity in Croatian tourism.