Entrepreneurship as a business activity and the process of creating added value is the basis for the development of a society, while micro, small and medium-sized entrepreneurship are the biggest drivers of economic development. According to the Law on Accounting in Micro Entrepreneurship, business entities that have an average annual number of less than 10 employees, earn an annual income of up to HRK 5.2 million and their assets are less than HRK 2.6 million. SMEs in Croatia becomes a sector in charge of initiating the overall national economy and continuously generating growth in the number of employees and of entrepreneurs. The research problem of this work was the discouraging environment for micro enterprises in Croatia. The paper deals with the strategies for the development of a stimulating environment for micro enterprises in the area of the City of Zagreb. The main aim was to identify the development potential of micro entrepreneurship in the City of Zagreb. So, the author conducted a survey with 12 closed questions. He personally talked individually with 26 micro-entrepreneurs in Zagreb from manufacturing and service activities. According to the views of most respondents, the legislative and bureaucratic system in Croatia is for itself a purpose. They emphasize the need for a more efficient and simpler way of business in the City of Zagreb and at the level of the whole country, public administration, local self-government and city administration. In a 2016 survey, 76% of Croatian micro and small entrepreneurs, as their main wish, set "simplicity in administrative procedures" because they are the biggest business difficulties. The main incentive instrument of the Ministry of economy, entrepreneurship and crafts is the program named "Enterprise impulse". In building an entrepreneurial environment, the state needs to establish infrastructure and implement entrepreneurial incentive policies. Financial and educational institutions as well as entrepreneurs themselves play an extremely important role. It is not enough to be ready to change and be reactive effectively, but a micro entrepreneur must anticipate and encourage strategic thinking and act proactively.