All the knowledge about running a successful online business directory business

  1. what is an online business directory”
  2. “Steps to start an online business directory”
  3. “Revenue and business model of an online business directory”


What is an Online Business Directory?

An Online Business directory is a platform with information in the form of business listings sorted in an organized way under categories and subcategories.

You as a customer can easily search information of business listing based on simple and advanced search parameters.

Plainly speaking, Online Business directories do exactly what yellow pages or printed local business directories in past did for us.

What are the different types of business directories?

The ever-growing reach of internet has given a boost to the business of Online Business Directories.

Today, we have generic business directories catering to needs of cities (our business directory was one of them – focussed on our city) or country-based business directories (think of Google My Business) providing information of businesses in the country.

And then there are niche business directories like Yelp and Zomato (directory for food businesses) ...

How to set up a business directory?

Setting a business directory is no rocket science.

You can easily find one of the ready to use business directory wordpress theme on the internet and get rolling with a business directory for as low as USD 100.

If you are well versed with WordPress, you can do it yourself !

On the other hand, if you are not interested in WordPress – you can easily hire a freelancer from platforms like upwork, freelancer, etc to set up a wordpress directory theme.

Setting up the business directory is easy, running it might not be as easy 😊

As soon as the online business directory is set up, you will come across a few terms used in the business directory.

Here is a simple explanation to help you understand the online business directory setup better:

  • Admin: The Administrator of the website. Who has the complete control over every single feature of the website.

Admin has to the power to approve, edit, delete, add – Users, business listings, Comments, activity, etc.

Also, admin can define the revenue model for the website by controlling the membership options and advertisement rates.

  • Vendors: They are the ones who post their details on the business directory.
  • Business Listing: A business listing is the listing of business, service or product posted on the website by a Vendor.
  • Category/ subcategory: The categories and subcategories are nothing but a method to properly segregate business listings properly in a business directory.

For example, if you run a business directory that provides information about restaurants in your city. The category could be cuisine and subcategory could be the type of meal (dine in, buffet, home delivery, etc) .

Most of the business directives have N Level of hierarchy for categories/subcategories.

  • Client/users: These are the users who will visit your website.

The usual facility available with them in the directory is to manage their profile, rate and review a business listing, comment and share on social media.

What is the revenue model of business directories or how do business directories earn money?

Like the business model of good old bulky printed directories, the business model of online Business directories revolves around highlighting paid listings. i.e, giving preference to the ones who have paid extra bucks and selling the advertisement space.

The revenue model of online business directory-based business(the majority of cases) revolves around two models:

  • Membership fees:

The concept is simple. Online business directories setup a membership structure where they charge you based on the facilities availed by you.

Let me explain you with an example. I am running a business directory and want to have a revenue model around the facilities I offer to vendors who list their business on our business directory.

I decide to have 3 membership levels: Platinum, diamond and gold.

The Platinum Members:

  • Pay $ 100/month
  • They get featured in top 2 listings in 3 categories (featured means getting that highlight around your business listing).
  • They are also given a facility to upload 15 pictures
  • Lastly, Platinum members get to link their 5 social media accounts to show regular updates posted by them on social media directly on their business listing page.

The Diamond Members:

  • Pay $ 70/month
  • They get featured in top 2 listings in 1 category.
  • They are also given a facility to upload 5 pictures
  • Lastly, Platinum members get to link only one social media accounts to show regular updates posted by them on social media directly on their business listing page.

The Gold Members:

  • Pay $ 30/month
  • They get featured listings in 1 category at the bottom of the page (not the top listing just a highlighted listing of their business at the bottom of page).
  • And They are given a facility to upload 2 pictures

Now, you can design own revenue models based on the market response and demand of the online business directory website.

  • Selling of Advertisement space:

Think of good old times when internet was just a tool to send emails. “Online” business directories were non-existent.

The business directory sales guys would come to our office to sell us ads space on their printed directory based.

If remember correctly. The ads on the cover page was the most expensive one and the one on inner pages were a little affordable.

The pitch always went based on how good the circulation of last business directory was and which page received how much appreciation.

Fast forward today and not much has changed, when it comes to selling ads space on the business directory website.

Although, there are some complexities involved at times which is understandable, considering how advanced markets have become. The core as based revenue model remains the same.

For the sake of simplicity, let me explain you the advertisement revenue models:

  • Fixed price for a banner space:

The simplest and easiest revenue model of advertisement is where you have a flat rate for fixed ad spaces on the website.

The customer takes a banner space and pays an X amount for the same.

  • CPC or CPM business model:

Most of the business directories find it difficult to get paying customers (especially, the new ones).

Hence, they rely on taking 3rd party ads from Google and other platforms (Facebook).

The ads are placed on the website at space which is usually meant for paying customers.

Well! Since there are no paying customers – why let space go waste?

The business directory website owner is paid based on CPC or CPM (CPC stands for Cost Per Click and CPM Stands for Cost Per 1000 impressions) at a rate decided by the advertising platform.

The same model (CPC and CPM) is implemented by famous directories for their paying customers where the customers are charged on CPC or CPM generated on the ads on the platform.

  • Revenue based on lead generation:

What really matters at the end of the day for any business spending money on market and promotions is the number of leads and quality of leads.

To address this, some famous business directories have started committing a minimum amount of leads as a part of their membership package.

I remember buying a similar package from a famous business directory last year. Although the number of leads generated was good – the quality of the lead was quite bad.

We did not renew our membership with them.

There are business directory websites that have well-designed revenue plans based on the number of leads.

You take a plan of say X dollars for 30 leads and so on.

How to market an online business directory website?

Marketing a business directory website can be challenging. To start with, you need to have a good amount of traffic to ask your members (vendors) to pay you a membership money.

And getting that traffic is not easy as the users only come to your website when they find a respectable number of business listings to help them with their searches.

I know of guys who want to get rich ASAP. From day one, they have a membership structure proudly displayed on the first page of their online directory website asking business owners to give money to get a space on their website.

And days pass without any registration.

Let’s understand the problem here. The complex scenario where you have to strike a balance between the number of business listings and keeping the website visitors engaged is a difficult one.

And, there are good chances of online business directory websites failing to either attract vendors or users. Thereby, leading to failure.

You need a smart strategy to market a business directory website.

Here is the strategy I suggest:

  • Start by populating information of business listings yourself. You can get a lot of data from the internet.

If your hands are full, hire a data entry operator to populate all the data for you.

  • Send an invitation email to all business owners (whose listings you have created) to verify their listing. In addition to verification, ask them – if they want you to remove the listing or make some edit to the listing.

Do not forget to mention that “Its free and how much you appreciate having them on your website”.

They are the sole reason for users to stay on your website. Make them feel special. As far as I know, no one minds a free business listing.

In fact, there are good chances some of them will come back to you suggesting edits to their listing. Make a relationship with them.

  • Once you have a respectable number of listings on the business directory, focus on driving traffic to the online business directory by using methods like:
    • SEO
    • Social Media Marketing
    • Email Marketing
    • Paid ads
  • Remember, Business directories can be “boring” at times. Think of adding new sections such as:
    • Latest news in your industry.
    • Latest blog with tips, tricks, advice should help.
    • Latest events in your industry can do the trick.

Be ready to bide your time waiting for that perfect balance of website visitors and registered vendors to happen.

Most of the online business directories I see failing are the ones who want to generate revenue from day one.

Alas! It does not happen so soon with new brands. Especially, online business directories.

What are the challenges faced by online business directories?

  • The biggest challenge and the most overlooked challenge is from Google My Business.

Type any business name in google and the first listing to show up will by Google My Business listing.

You have to beat them to be the best.

  • The money required to market online business directories is not the same as setting up a business directory.

There is another big misconception about an online business directory.

People think it is affordable to run a successful business directory.

Let me tell you one thing, it is affordable to set up an online business directory.

But when it comes to running one, you will not at all find It affordable.

There are going to be expenses in digital marketing and data entry. Be ready to spend some money.

  • The revenue model of online business directories is not easy to set, and this post were writen with a lot of first-hand experience.

We, the customers are a spoilt lot. We will expect a new business to go a little out of the way to give us more than what their simple membership plan offers.

Work on a revenue model which is fluid and you can evolve it with time.

  • Creating trust between the users and vendors is another challenge. You will have to be on top of activities on the website to make sure, the spammers are always kept at bay.

What are the steps to start an online Business Directory?

Starting an online business directory involves the same steps as starting any online business.

  1. Setup an online business website
  2. Populate the website with data
  3. Market the online website
  4. Follow the revenue model when you have a decent amount of traffic coming to the website

I have already explained you all the steps in detail above.

Still, I know there is nothing as good as a real-life example.

Before you start doubting my credibility, here is what you must know “Other than helping a lot of clients setup online business directory businesses (the techie work), I have run a successful online business directory business”.

Here is the story of

“All that glitters is not gold”.