Remember that Google and the other search engines are striving to return the most relevant results. So, when someone types in, say, "best Italian restaurant Perth" they want to find the best Italian restaurant in Perth, not the best (ie, most highly optimized so as to manipulate the rankings) website for an Italian restaurant in Perth.
That's not to say that any local restaurateurs aiming for the above mentioned traffic should forget about SEO considerations entirely and just get back to the kitchen to improve their meals! But they should be mindful that the website is not merely a sign that you hold up in front of Google, hoping to get chosen first.
A website is a conduit for your business. When it comes to on-page factors you should be trying to pour into it lots of clear evidence that you really know you're stuff; that you're good at what you do; that your products and/or services are top notch. This is why it's great if you have a blog, or if you include other forms of content such as videos and podcasts that get added regularly. With all this relevant, original, quality content under your domain Google can tell that you are a good business that deserves to be noticed. This quality content also functions as linkbait, and while backlinks are not as important as they used to be, they are still very helpful -- particularly if they come voluntarily from relevant blogs and sites that Google already knows and respects.
Just as you can show Google directly how good your products and services are, indirect or off-page signals are powerful too. That's why it's so useful to engage regularly, helpfully and thoughtfully on social media sites if you can find the time. These all build authority. And that's what Google is becoming increasingly fine tuned to detect and reward.
So, if you keep remembering to build this authority -- not merely advertise -- in different areas of the web, Google will factor this into its calculation of the quality and relevance of your site when someone types in a search phrase you're aiming to rank for. And while you may not be top dog straight away, odds are you'll be a good few positions higher than before you started repeatedly sending those powerful signals.