Family businesses constitute one of the most prevalent organizational structures globally; however, their sustainability over the long term remains tenuous, especially during intergenerational succession processes. Although current research has identified an extensive range of succession factors—encompassing individual preparedness, family relationships, and organizational governance—there remains a limited comprehension of how these factors are practically implemented by family business owners in the process of selecting a successor. This study performs a systematic literature review to analyse the theoretical foundations and empirical evidence concerning successor selection in small family businesses, with specific focus on situations involving multiple prospective candidates in Indonesia. The review integrates perspectives from multiple disciplines, such as stewardship theory, entrepreneurship theory, knowledge management, and emotional and social wealth, to delineate the factors that influence the succession process. Findings indicate that succession is a relationship-oriented and knowledge-driven process influenced by the interaction of competence, motivation, trust, family cohesion, governance frameworks, and contextual risk factors. Furthermore, the process of decision-making in successor selection is demonstrated to be constrained by emotive, cultural, and contextual factors, particularly within collectivist contexts such as Indonesia. This review emphasizes a significant research gap regarding the manner in which small family business proprietors incorporate theoretical succession factors into their practical decision-making processes. It establishes the groundwork for an empirical framework to examine successor selection strategies and advances both scholarly discussion and the practical implementation of succession practices in small family businesses.