What It Is
Your website says who you are in sentences written for people. Structured data says it again in a format written for machines: your business name, address, phone number, hours, the area you serve, the services you offer. Visitors never see it. It sits in the page's code, and it uses a shared vocabulary called schema.org, which Google, Microsoft, and other search companies created together so that every business describes itself the same way. You will also hear it called schema or schema markup.
How It Works
For a local business the starting point is the LocalBusiness type, or a more specific one when it exists (a plumber, a dentist, a restaurant). Google recommends writing it in a format called JSON-LD, a small block in the page that does not touch anything visible. Google reads it when it crawls the page, and can use it to show richer results, like hours or a menu link beside your listing.
Two honest limits. Structured data makes a page eligible for those richer results; it does not guarantee them. And Google will not show star ratings for reviews a business publishes about itself, so marking up your own testimonials does not put stars on your listing.
Why It Matters for Being Found
Without structured data, a search engine works out what your business is by reading your paragraphs, and it can get the details wrong. With it, the facts arrive stated plainly and in a form that should match your Google Business Profile and everywhere else your business is listed. That matters more each year as answers get shorter. When Google or an AI gives a customer your hours in a single line, you want that line to come from you.