Every small town offers its own culture and demographics, so there's no single business idea that will work in every small town. Instead, your goal should be to learn as much about the town as possible, to critically evaluate the area's needs and then to find a business idea that fills an open void.
Vital Services and Products
In small towns that are isolated from larger metropolises, it can be challenging to access basic needs such as quality groceries, organic and locally grown foods, beauty and cleaning products and technology supplies. If there's a basic need that is missing in your community, start a business to fill it. General and convenience stores, grocery stores that specialize in goods you can't otherwise get and technology businesses can all thrive.
Small towns don't always offer much for locals to do. By filling an entertainment void, you can quickly draw in interested customers. Skating rinks, bookstores, coffee shops, movie theaters, bars and night clubs can all succeed. No matter which option you choose, though, your business should offer something special. For example, while bookstores fail every year, if you turn your store into a community meeting place and offer regular events, it can develop a loyal customer base and thrive.
If your small town is a frequent tourist destination, offer something that takes advantage of the flow of visitors. A business focusing on the area's history, offering tours or providing accommodations can succeed. If the town is known for a specific historical tale or location -- for instance, a local ghost story or the site of an important Civil War battle -- highlighting this significance can help drum up interest.
Every small town offers something distinctive, so take advantage of this and create a cultural hub. An art gallery, local craft store or even a flea or antique market can thrive, particularly if the area is known for its culture or gets a lot of tourists. It can work to attach such a venture to an already successful business, such as a coffee shop or bookstore.