The digital economy, which encompasses all types of economic activities, creates new challenges and simultaneously new opportunities for entrepreneurs by requiring extensive use of digital technologies, the Internet, and data. Although family businesses emerged in the late nineteenth century in United States, now they are the backbone of the global economy. At a time when the digital economy is rapidly expanding, family businesses are represented at all sizes and sectors, from small businesses using manual labor to large corporations specializing in high-tech manufacturing. Despite family businesses have proven that they have the potential to better overcome challenges than other businesses by mobilizing their internal resources even during financial crises, the era of the digital economy has created new challenges for them. Adapting to current demands is especially important for increasing the competitiveness of family businesses at the SME level, which play a vital role in the economy in terms of ensuring socio-economic progress and the development of the middle class in societies. Currently, family businesses need to improve their human resources, technological capacity, customer experience, and overall business management to seize opportunities by adapting to the demands of the digital economy. Therefore, by analyzing the main challenges of the digital economy, the characteristics and functional capabilities of family businesses, the issues of combating the difficulties faced by family entrepreneurs in the conditions of digital transformation and evaluating new opportunities for them are studied.