Purpose The purpose of this paper is to identify a useful taxonomy of frugal innovation (FI) applied to women-led family businesses in rural communities in Oaxaca, Mexico when confronted with disruptive situations such as the recent COVID-19 pandemic, thus achieving a greater understanding of FI in this context to provide these businesses with strategies that allow them to face crises more effectively. Design/methodology/approach The study was cross-sectional and quantitative. A scale was developed and applied to 160 family businesses run by women and located in four rural communities in Oaxaca, Mexico. A review of the literature from the period of 2018–2024 made it possible to identify the essential characteristics of FI. Findings Through an exploratory factorial analysis, four types of FIs were identified: new production and marketing models, new methods of operation, new financing methods and new organizational methods. Using a discriminant analysis to establish the functionality of the identified FIs, the authors found that shifting to new financing and organizational methods was more important for the survival of family businesses in times of crisis. Originality/value This study highlights the forms of FI that develop in small family businesses led by women; this is important for the survival of the family and the business. The research highlights innovation challenges and opportunities for women entrepreneurs in the global south.
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