The study examines the role of small farms in the development of entrepreneurship and family business, which contribute to the sustainable development of rural areas in Bulgaria. The aim of the article is to outline the socio-economic importance of small farms on the sustainable development of rural areas, to reveal structural changes and to assess the impact of the implementation of the Common Agricultural Policy. The strengths of small farms for rural development and their needs are highlighted. The difficulties faced by producers in starting a family business are outlined. The results of the study clearly show that small farms are of great social, economic and environmental importance for rural areas. The lack of a definition of “family farm” in the national legislation hinders the process of integration of small farms in economic terms, which in turn affects the sustainability of rural areas. A preliminary assessment of the impact of the implementation of the Common Agricultural Policy on small farms has been made.