Search engine optimisation or SEO refers to the process of improving the position that your website appears at in the "organic" search results returned by sites such as Google.
As a general rule of thumb, sites that appear higher up in the results will get more traffic to their pages, and so potentially more business. Your goal is to get to page one and ideally to position one, but whether that is feasible largely depends on the market that you are operating in.
If you're in the mobile phone space or travel, you'll be fighting a losing battle unless you've got a sizeable budget to spend. However, if you're offering a niche product or a service in a defined geographical area, you stand a pretty good chance of at least getting to page one if you are patient and follow these basic principles.