This document covers five broad topics from theory of small bodies: planetesimal formation, cosmochemistry, thermal evolution, collisions and dynamics. Each of these topics is described in a separate section, where we prioritize selected main issues over completeness. The text points out the principal unresolved problems in each area, and suggests ways how progress can be made. This includes support for new code development, observations and experimental work that can be used to constrain theory, new research directions, and studies of cross-over regimes where the system's behavior is determined by several competing processes. The suggested development areas are placed in the context of NASA space exploration.