How Google ranks local results
Relevance, distance and prominence, and what you can actually influence.
Google documents three factors for local ranking: relevance, distance and prominence. To see how they play out street by street, read about geo-grid rank tracking. Everything else is a lever on one of those.
Relevance
How well the profile matches the search. Primary and secondary categories, services, the business name and the description all feed this.
Distance
How far the result is from the searcher, or from the location in the query. You cannot change where your customers stand, which is exactly why a grid is the right instrument.
Prominence
How well known the business is: reviews, review scores, links, citations and general web presence.