This isn't that hard.
Citations are mentions of your business name and bricks and mortar addresses on google trusted sites. The more the better.
Set yourself up a spreadsheet and reverse engineer all the backlinks of the top 5 in any given niche. Dig out any that look like citation sites, some will be obvious like Yelp or yell.com.
Once you have that list then make sure you also get citations on those sites for the business you are looking to rank. Ensure the name, address, phone no website email ect is entered exactly the same on each site, this is vitally important as you want google to know is is the business it says it is. Basically the more citations the better your chances.
Some work will also be needed on the onpage seo. For the hairdresser example above you need to think of kw which will go with hairdresser/city cheap, mens, ladies are a few, one maybe even stylish? (this isn't my field) and intelligently add them to the page or meta's. Don't over do it so it looks spammy (mind you kw stuffing seems to be working quite well at the moment in some niches but I still wouldn't advise it).
Finally reviews will also help so if current customers already have google accounts ask them if they would be kind enough to review your service.
Finally don't expect results overnight, if you do do this right it will be several Months before you notice.
In the meantime look to develop other ways of marketing your business. Although a place in the 5 or 7 pack is great it won't be the be all or end all for the hairdressing niche. Most people looking for one will do so on recommendation, yellow pages or adverts in a paper. Few will search the www. Even free adverts cards in Tesco/Wallmart depending on which side of the pond you are. I would think leaflet drops (local area) coupled with some sort of promotional offer would also work well in building customer base.
