This paper discusses the notions referring to family-owned businesses. It will be explained who an entrepreneur is and what his/her essential characteristics are, and we will learn what his/her capabilities and features are. In addition to the necessary qualities an entrepreneur needs to have, what is also important is the environment he/she is located in, as well as the existence of economic and political freedom. Alternative definitions of the concept of family-owned businesses and their advantages and disadvantages will be shown. Reasons stated by individuals for starting their own businesses will be presented. The paper shows the importance of family businesses in the world economy and their contribution to the economy. The difference will be drawn between a family subsystem consisting of emotional relationships, family desires and stability maintenance, and a business subsystem whose fundamental interest is to improve business performance. Both systems have different goals, and balance is needed to avoid conflicts. As a family-owned business develops, more and more family members become involved. The inclusion of the new generation can lead to conflicts referring to the wish of sons or daughters to become independent. Conflicts can be constructive and destructive. The business may involve father or mother as the founders of a family-owned business, couples, sons and daughters, daughters-in-law and sons-in-law. The paper will present decision-making processes, capabilities of family members and the issue of choosing a successor.