A website which lists & categorises businesses based on niche, location, activity or size. Each entry includes details like the businesses’ contact details & a link to their website.
The information in a business directory could be gathered through submissions, collected from data aggregators like Axiom or even automatically gathered using a software.
Directories can help in strengthening local SEO. If your business is listed in a high-ranking directory, many users might click on it & come across your businesses. And if your businesses website is listed alongside other trustworthy websites, it shows search engines that you are trustworthy too.