Change a small business venue to a Residential Small Business

I had the same problem and figured it out. 

So first I went to the small business settings under the owner and unassigned all lots.

Then I went to manage worlds and clicked on the business lot, and clicked more (the 3 dots at bottom right of screen) and there will be one icon with option to sell the business lot. Click sell, it will send all the money to the owner's household.

Click on the business lot again, enter build mode (also bottom right of screen).  Change the lot type at top left of screen to residential.

Then go back to manage worlds and go into live mode of the household in original house. Click move household on the phone/computer. Move into the the business (now residential) lot. It should automatically change the lot into small business residential when the household moves in. Assign residential and public areas, and you're good to go!