Family businesses have been noted to scale global heights with successful examples such as Samsung, Walmart, Tata Group and Porsche among others. Family businesses also have a huge stake in economic development noting that they constitute approximately 80% of all companies globally. Despite these strong statistics on global presence, family businesses face an equal measure of challenges and struggle to thrive, with approximately 70% lasting just one generation and another 50% failing to survive the transition from second to third generation. This research focused on the key success factors for family businesses. Reviewed research studies had focused on Western countries and examined a variety of factors driving success.
Findings reflected succession planning, employee retention and professionalism as prominent factors affecting the performance of family businesses either positively or negatively. These formed the focus of the current research to determine their impact on performance of family businesses in Kenya and the extent to which they were central to the success of the businesses. The research was quantitative in nature and targeted a population of family business owners from the Kenya Private Schools Association. The study relied on primary data collected through questionnaires. Based on the results of the data analysis, all three factors - employee retention, professionalism and succession planning recorded strong and positive correlation with family business success in that order with employee retention showing the strongest correlation. The inference from this research is that family business owners should seek to address all three factors within their organizations as they were all found to be critical to the success of family businesses. Management should prioritize how to gradually address these three factors for sustainable development in their businesses. Investing in employees for the long-term emerged as one of the key recommendations noting that long employee tenures could propel business success. This was accompanied by the need for performance-based evaluations so as to ensure that the business derived value from its workforce and that top talent was retained in the business. Finally, family business owners were encouraged to involve proposed successors in the business as early as possible while seeking their consent and qualifications to ensure commitment to succession planning.