To understand what kind of business to open in a small city, you need to realize all the restrictions that the small size of a city places on it.
1) The lack of a large number of highly qualified personnel. This means, for example, that in a small city it is difficult to open a business for the production of software or, say, a design bureau.
2) The insufficient number of consumers, and therefore the impossibility of the existence of certain types of business, for example, highly specialized stores (second-hand, philatelic, etc.)
3) Closer than in big cities people’s communication with each other. News of poor-quality products or poor service will go away quickly.
Like everything in this world, business in a small town has its advantages:
1) Closer than in big cities, people communicate with each other. News about quality products or good service will go away quickly.
2) A cheaper labor force than in a neighboring large city. You can do outsourcing (i.e. fulfill orders of companies from large cities).
3) Low rental prices. This will allow you to start a business with less start-up capital.
4) The possible lack of sales offices of some successful companies. You can start a business in a small town by selling products there that no one else sells. In order to protect yourself, you can conclude an exclusive supply agreement with the supplier.
You can also create an MLM (network) company representative office. However, be careful in your choice and do not mess with the financial pyramids.
What business to do in a small town
As in a big city, where there is a lot of competition, business in a small city has its own particular problems. There may not be dozens of companies selling similar products or services, but there are buyers with strong habits who resist the new and the unknown.
However, this should not discourage you from starting your business. You just have to be smart. Opening a grocery store across the street from one that has existed for 20 years and is the main source of food for a town with a population of 3,000 people is probably not the best move. And this is not to mention that significant investments are required to open a grocery store.
If you don’t know which business to start, the best approach is to find a market need and satisfy it. This is true for any start of business, but especially in this case. You may find that providing services is a much safer way than retail.