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This study aims to identify and formulate internal and external factors, and formulate altenative development strategies of Village Owned Business in Merbau Village. The basic method used is analytical descriptive method. The location of study was conducted by purposive method, namely in Merbau Village Bunut District Pelalawan Regency Riau Province and the informan conducted by key informan. Data analysis method used is IFE Matrix, EFE Matrix, IE Matrix, and SWOT Matrix. Results of the study based on IFE matrix scores are known to be the greatest strength is the existence of good relations between the management and the village government and the biggest weakness is the limited management resources in management. EFE matrix score shows that the biggest opportunity is the potential and creativity of the community can still be developed and the biggest threat is low community participation. Based on the IE Matrix analysis, the development of Village Owned Business Merbau Village in cell II which is growing and developing with strategies that can be developed is intensive and integrative. The alternative strategy for developing Village Owned Business was formulated in the SWOT Matrix which produced several alternative strategies with combination of SO, WO, ST, and WT.