The chapter aims to describe an entrepreneurial climate in small and medium enterprises (SMEs) in Bosnia and Herzegovina. The study is based on a qualitative approach, using interviews for data collection. It portrays the path way how the entrepreneurial mindset is created in SMEs. Each part of the path is elaborated in the way how this mindset is understood, established, and maintained throughout the entrepreneurial cycle. Interviewees are business owners or CEOs of SMEs who are competent to elaborate answers for asked questions. Results show that entrepreneurial mindset and spirit are created out of entrepreneurial orientation (EO) dimensions along with the internal marketing and networking. Contribution and other implications are further discussed.