Small enterprises have scarce resources, which is the main factor hindering their innovation of new products. Despite this resource scarcity, some small enterprises do innovate. The research question is: how do small enterprises manage resource scarcity in their product innovation processes? A multiple case study of three different small enterprises was used to answer the research question. The enterprises implement several approaches to use existing resources more efficiently or increase existing resources, such as reducing formality and including customers and users in the innovation processes, intertwining innovation processes, working concurrently on innovation and operational processes, adopting lead-user inventions, and only starting innovation processes when a current customer asks for or needs the potential new product. The efficiency of these approaches is found to be explained by common small enterprise characteristics. One conclusion from this study is that resource scarcity can be managed and small enterprises’ specific characteristics can facilitate innovation if these are recognized and used as strengths.