Well since I'm on a roll, here's how the initial setup will go.
The most important part in my opinion is the structure of your website. My site is going to be a hybrid of the directory and client sites (see the 200k project).
So we have directory.com. That's going to be driven by eSyndicat (or your favorite directory program). I'm going to have to hack up a design since theirs really aren't that aesthetically pleasing.
Now the second tier (client sites) is going to be under directory.com/sites. That's going to have WordpressMU set-up. That will incorporate a leasing structure, and various upsells (logo, webdesign, seo, reviews, video) will be used with that.
Driving traffic will be the next issue. PPC will be used along with organic seo, but the most important thing you can do is build a community around your site. Since I'm doing restaurants, I'll get on FB and MySpace and get some friends in the area. Don't do anything spammy; you're trying to create value to the user. Create groups like "Atlanta Suburb Foodies" or "San Diego Wine Lovers" and invite them to be a close group of reviewers. Develop a following, and you have free content generation. You can even give them their own blog (the /sites/ part).
Another thing you can do is go on CL and yelp and start pumping out partial reviews and have "to see the full review, goto directory.com."
Now for conversions. Show the business that you are offering value. That in a recessionary economy you want to maximise your advertising dollar. If your niche has clients that only indirectly compete, show how the sum is greater than the parts; that their advertising dollars on your site will be pooled together to drive larger ad campaigns (PPC, radio, newspapers) which in turn will give them a targeted demographic.
I'll add some more later, but I drank too much Monster and I need to take a rest.