Most of the advice on this is written for people launching startups. If you are a plumber, a bakery or a law firm, the decision is simpler than the internet makes it sound, and you can be done in twenty minutes.
Start with your business name
If your business is called Hartley Plumbing, try hartleyplumbing.com first. That is the answer for most people and the rest of this article is about what to do when it is taken.
Resist the temptation to be clever. Somebody who hears your name on the radio, sees it on a van, or gets it from a friend will type what they heard. A domain that does not match your business name means you lose those people, and word of mouth is where most small business work comes from.
Get the .com if you reasonably can
There is a lot of writing about how alternatives are fine now. They are fine, technically. But people still assume .com, and if you are on a different extension you will lose a share of the traffic to whoever owns the .com.
That matters most if you have any offline presence at all. If somebody can hear your name spoken, .com is worth paying for.
When an alternative genuinely makes sense: a country extension where you only serve that country, or a well-established local convention. Otherwise treat .com as the default and everything else as a compromise.
What makes a name work
Short enough to say out loud. The test is whether you can give it over the phone without spelling it twice.
No hyphens. Nobody remembers them and nobody says them. hartley-plumbing.com will send half its traffic to hartleyplumbing.com.
No numbers, for the same reason. Is it 4 or four?
Nothing ambiguous when spoken. Anything where the spelling is not obvious from the sound will cost you. Consider what happens to a name with an unusual spelling when a customer recommends you verbally.
Not too narrow. hartleyboilerrepair.com is a problem the day you start doing bathroom installs.
Keywords in the domain
The short version: a keyword in your domain is worth very little for ranking, and it has been that way for years. A domain like bestplumberdallas.com will not outrank a good site on its business name.
That said, if your business name happens to contain the thing you do, that is a small bonus and a real clarity benefit for anyone reading the address. Do not invent a name for it.
When your first choice is taken
In rough order of what to try:
Add your city or region. hartleyplumbingdallas.com. This works well for local businesses and costs you nothing in credibility.
Add the trade. hartleyplumbingco.com, or drop a word that is doing no work.
Try a different phrasing that people would still recognize from your name.
Consider buying it. If the domain is parked and for sale, it is a negotiation and the price can be anything from a few hundred dollars to absurd. Worth an enquiry if the name really matters; not worth reorganising your business around.
Change the business name, if you are new enough that it costs nothing. Easier before the signage.
Two things to check before you buy
The renewal price, not the first-year price. Registrars advertise a first year at one or two dollars and renew at thirty or more. Look at what it costs in year two, because you will pay that every year afterward.
Whether somebody has a trademark on it. A quick search of your national trademark register takes five minutes and can save you a very bad letter later. Being first to register a domain does not protect you from an existing trademark holder.
What it costs
Ten to twenty dollars a year for an ordinary .com. Premium extensions like .io or .ai cost considerably more, every year.
Some platforms include one. Swiftrics does, on every plan, so for our customers this line disappears. We wrote about the rest of the numbers in what a small business website actually costs.
Who should own it
You. Not your web designer, not your nephew, not an agency's account.
This sounds obvious and it goes wrong constantly. Domains registered by a departed contractor are one of the most common ways small businesses lose control of their own address, and recovering one can take months. If somebody else is setting this up for you, make sure the registrant is your business and you have the login.
Then stop thinking about it
The domain matters far less than what you put on it. Pick something clear, make sure you own it, and spend the energy you saved on the pages themselves.