Purpose: The purpose of this study is twofold: (1) to identify servitisation routes of SMEs, and (2) to identify the microfoundations of dynamic capabilities that influence the different steps of a continuous servitisation model. Design/Methodology/Approach: In this longitudinal study, servitisation in three product-oriented small and medium sized enterprises (SMEs) have been studied. During the past year, the SMEs have developed their service businesses according to an iterative servitisation model consisting of four states; Identify, Package, Sell, and Innovate. The servitisation processes were studied through action research. Findings: Three different routes of servitisation were identified; 1) a product-oriented route, (2) a service-oriented route, and (3) a solutions-oriented route. The dynamic capabilities developed within the companies throughout their servitisation processes differed based on their business logic and influenced the result of the processes. Originality/Value: The study contributes with knowledge on how servitisation can be performed in SMEs in practice. Moreover, it combines the research fields of servitisation and dynamic capabilities, which enrichens the servitisation literature with an important but sparsely researched perspective that focus on the change inherent in a servitisation process.