The general formula for analyzing a business is to constantly monitor both internal processes and external variables. Internal processes may vary depending on the type of business but usually include operational and performance issues. External influences can include government regulation, competitors and economic factors. Both internal and external elements can dictate the success of a small business. Most small companies use several key tools to analyze their businesses.

A business strategy is an outline of the actions and decisions a company plans to take to reach its business goals and objectives. The strategy defines what the business needs to do to reach its goals, which can help guide the decision-making process for hiring and resource allocation