You will get to choose from a list of families that want to move into your town, as well as commercial businesses. You decide whether or not you want to give them the funds necessary to start their business. You control the size of your town. The objective is not necessarily to grow the largest town possible, but rather to be successful with what you have. You could have a town with one hundred families, or have just a few families, keeping the relationship with your sims more intimate and personal.
Friendship is also an important factor in the sims lives.
You want to make sure that there are other sims around that your people can develop friendships with. You will need to provide money, clothes, friends, descent jobs, etc, for your people. Obviously just one family is not enough to achieve your goal because your one family will have no friends, nor is their anyone in town to purchase anything and make any businesses money. This forces you to find equilibrium for the economy of the town. You must balance the businesses with the neighborhood needs.