There are a lot of good case studies done by people to better optimize your campaign. In general though it takes a bit of tinkering. Test out your first ads with a few dollars, analyze results then tweak your campaign and run again then analyze then tweak then run again. Eventually your conversion rates will be optimal and your campaign efficient enough to spend a large sum of money on it. I usually start with a ad campaign and put 20 dollars towards it then analyze and tweak by changing my bidding, the type of ad I use, the landing page, the keywords I am using , and the criteria for how my money is spent. Eventually I have optimized it enough to put a few hundred dollars towards the campaign.

As kmanbloquet mentions, there are many good resources out there. One of my favourite for beginners is this one: PPC Hero’s Beginner’s Guide to PPC | PPC Hero®

Adwords' own Help section is also very thorough, however all the resources you find will only help you along so far: you definitely learn the most by running some campaigns.

Since it is a local business you run you should be aware of location targeting to make sure your ad is only shown to people who live in your area.

When you start a new campaign be sure to watch it closely for the first couple of hours/days to make sure you don't waste through your budget with no return.

If ads have low CTR (depends on your niche but anything below 1% is unacceptable), change them. If you don't get any conversions, change your landing page or accept that the keyword did not work and move on.

Make sure to do constant A/B testing on your ad copy.

They can always be improved and tweaked. Even if it just capitalizing a single word.