A business model is well known concept that describes an organization´s operations. A robust business model, respectively innovating an existing business model, can enable company growth, turnaround, resilience and quick recovery in a crisis. However, in the context of the crisis, business model innovation has rarely been researched, which is why this thesis aims to investigate the elements of the business model and the decisions of business owners and managers about business model innovation during unique crisis – Covid-19 pandemic. The results of a sample of 114 companies in the area of the City of Dubrovnik indicate empirical support that companies change degree of digitalization and react with business model innovation in order to better cope with difficulties during the pandemic. These results indicate that location and financial resources and degree of digitalization are important in explaining resilience and recovery during the pandemic in the sample of companies in the City of Dubrovnik. The results can be useful to current and future entrepreneurs, managers, investors and public policy makers to understand processes within companies during unusual crises.