Why some individuals are more successful in business than others is among the influential questions in entrepreneurship research. The purpose of this chapter is to investigate the challenges affecting entrepreneurship development in Tanzania. This is a qualitative study comprising of three case studies on Tanzanian small- and medium-sized enterprises (smes) conducted with the aspiration to describe the drivers of being entrepreneurs, drivers for SME development, and challenges affecting their business performance. The findings suggest that the motivation for the interviewed owner-managers to start a business varied from their need for independence, to make a living, to increasing personal income. Furthermore, self-determination, creativity, passion, and respect for business were at least mentioned by all owner-managers interviewed as a major driver for their success. Other success factors include the desire to fulfill family responsibilities, having more customers, and trust. The findings also suggested that lack of access to finance, international competition and cheap imports, a problematic business environment, unreliable power supply and poor infrastructure are major factors affecting the performance of wood furniture enterprises in Tanzania. Based on these findings, a number of recommendations are put forward to SME owner-managers and to government and agencies that assist smes development in Tanzania.