Staying resilient in a changing market: why business model innovation matters for SMEs
For small and medium-sized businesses, resilience is increasingly less about simply weathering disruption and more about being able to adapt before circumstances force you to.
The scale of business churn in the UK illustrates the challenge. In 2024, more than 317,000 businesses were created, while almost 280,000 ceased trading. For SMEs operating with limited resources and significant exposure to changing customer expectations, costs, technologies and competition, the ability to adapt can be critical to survival and growth. As Anna Holland, Associate Professor in Management at Surrey Business School, explains:
This is at the heart of Business Model Innovation (BMI). Importantly, innovation does not necessarily mean inventing a completely new product or investing heavily in technology. It can mean rethinking who you serve, what you offer, how you deliver it, who you work with, or how you generate revenue. A service business might move from one-off projects to subscriptions. A retailer might develop new digital channels. A manufacturer might add services around its products. A professional services firm might rethink its customer segments or partnerships. In each case, the business is changing how it creates, delivers or captures value.
Evidence suggests that these changes can make a meaningful difference to SME performance and resilience. Business model innovation can help businesses respond to changing markets, identify new sources of value and create opportunities for growth. It can also be approached incrementally: rather than redesigning the whole business at once, leaders can identify one area that could work differently, test it with customers, learn from the results and decide whether to develop or scale the idea. For an SME leader, this means asking some straightforward questions: Are our customers’ needs changing? Could we serve them differently? Are there new channels or partnerships we could use? Could we develop recurring revenues or additional services? And are there activities that consume resources without creating enough value?
These are practical challenges explored throughout Help to Grow: Management at Surrey Business School, supporting SME leaders to turn strategic thinking into action and build businesses that are not only able to respond to change, but positioned to grow through it. To find out more, please click here.
Related sustainable development goals
