Family entrepreneurship refers to a family's participation in economic activities with the goal of profit, regardless of the institutional aspects of corporate administration and control. Familyowned enterprises have a large influence on employment and income in Croatia, employing almost half of the workforce, and the majority of small and micro firms are also held by families. Although there is an increasing trend of generational shift among these organizations, the absence of institutional support poses a hurdle to the transfer process. The biggest challenge for these businesses is frequently the founders' emotional attachment and a lack of impartiality when evaluating the competency of family members for management. The majority of family company owners in Croatia have little experience with inheritance, making the transfer procedure even more onerous. Many people are unaware of alternatives to intra-family inheritance, which is frequently the favoured option. The next generation should willingly take over administration of the family business and have the necessary education and experience, which can be gained inside or outside of the firm. Gavrilović's firm and the Arko trade demonstrate the significance of family companies for society and the economy. Their success is based on tradition, good product quality, and the continuous transmission of values to future generations.