Everton have named just seven substitutes, including two goalkeepers ahead of their Sheffield United clash.
Speaking to TNT Sports, Dyche said: 'It's not ideal. We're stretched.'
He added: 'The business model of the club is changing.
'We didn't want Alex (Iwobi) to leave but you have to good at the reality of the situation.
Everton's limited substitutes come after the summer transfer window saw Alex Iwobi leave at the end of the transfer window for a fee of £22million to Premier League rivals Fulham.
Conor Coady also departed at the end of his loan spell to Leicester City, alongside Neal Maupay who returned to his former club, Brentford.