Some webmasters believe that you need to spend a lot of money on a directory script, template and promotion to have a successful directory. While this may be true if you are trying to develop a very popular directory, even the largest niche directories have only a few hundred visitors every day.
The basic requirements are:
1. Get a good domain name, should have a lot of backlinks since you will save money in link development.
Cost – $7 – $35 depends on the registrar
2. Hosting package : many companies offer web hosting with unlimited add on domains, so hosting for a particular domain should not cost more than $2-3/year
If you wish to keep costs low, you can use free directory scripts like phpLd and phpLynx . Though these scripts do not have many features, there are many free templates and modifications (mods) available.
For promotion, announce that your directory is accepting submissions at various forums. Most SEOs are always looking for back links, so you will receive a lot of submissions.