Google, Yahoo, and Bing all offer local business lists – Google’s is called Places – this will also list your business in Google Maps and will appear when people search there as well – you can see the Webs9 Google Maps listing here.
All the search engines also allow you to advertise within a specific radius of your business. If you only wanted people who were within a 20 mile radius of your business to see your advertisement – you can control that. Same thing generally applies with larger website advertising like Facebook and Youtube.
Finally, you can optimize your site for the region in which your business is located. While you will still get some visitors outside of your area, the majority of people will be from your immediate area.