Majority of the multinational corporations started as Family Owned Enterprises. Currently, the SMFEs sector in Kenya contributes over 70% of the country's GDP. This is in spite of the many issues surrounding this vital sector including low performance as compared to non family enterprises, high mortality rate especially after the founder exits, and lack of finances among others. The study seeks to establish the effect of risk taking and the performance of small and medium family owned

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... s performance in Kenya. Psychological / Trait Entrepreneurship theory and McClelland Motivation theory were the theoretical framework for this study. Descriptive and exploratory research designs were adopted. The study population was the manufacturing family owned enterprises registered by Kenya Association of Manufacturers based in Nairobi City County. The respondents were the Founders, C.E.Os, Directors and Managers of the firms. Data was collected using a questionnaire and the quantitative data was analysed by calculating the response rate with descriptive statistics such as mean, median, statistical deviation and proportion using Statistical Packages for Social Scientists (SPSS) version 21 and Microsoft Excel. Inferential data analysis was carried out by the use of factor analysis and correlation analysis to determine the strength and the direction of the relationship between the dependent and the independent variables. A regression model was fitted and hypothesis testing carried out using multiple regression analysis and standard F tests and t-tests. The qualitative data was analysed using content analysis. Microsoft Excel was used to analyse the frequencies of the emerging themes. Data was presented in form of graphs, tables and pie chart among others. Results of the study revealed positive and significant relationship between risk taking and family owned enterprises performance.