Despite an expanding body of literature on business models there is little acknowledgment of the role of SME heterogeneity and context in business model development. In order to address this, within this special issue, we move away from a “one size fits all” approach by recognising the heterogeneity of SMEs and implications of heterogeneity for business model conceptualisations and constructs. In so doing, we explore the influence of the inherent characteristics of SMEs on business model development, design, processes and associated value drivers and the ability of SMEs to innovate and sustain their business models. We structure this special issue around three important questions: the applicability of business model conceptualizations to SMEs, the relevance of SME capabilities for business model innovation, and the influence of SME heterogeneity on the nature of their business models. We then present a research agenda, the aim of which is to guide further development and convergence of the SME and business model disciplines.