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Incoming links are very powerful for improving search engine ranking. The number of links is important, but so is the quality of the sites the links are on, and the text of those links.
The number of sites that link to your site is a key way search engines determine the value of your website. A good way to start getting links is to create profiles for your business on social networks like Facebook and Google+ with links to your website. Beyond that, it's all about who you know. Industry associations and non-profits to which you've donated are good places to try to get links.
One catch is that the sites linking to you need to be high quality. If a site that links to you doesn't get any visitors, doesn't show up in search results, and doesn't contain any useful content, why would a search engine care what that site thinks about you? Because of this, don't do what used to work: creating hundreds of worthless sites with the sole purpose of linking to you, known as "link farms". The links need to be legitimate. Even link trading is a bad idea now. If you link to them and they link to you, the search engines will know what you're up to. Do it right. Make content worth linking to.
One example of this is Thumbtack. Here is a link to our listing.
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Once you get links, pay attention to the text of those links. Search engines know that if the phrase "restaurant in Knoxville" is linked to your site, you're most likely a restaurant in Knoxville. If the link text is "click here", that's not very informative.
Once you understand how search engines rank your incoming links, you're ready to move on to making those links work toward getting you conversions.