Obviously if it's an established business that many people already know about, or will become aware of in a short space of time, then you should just go with the former option. People will search for the name and your site will be at the top of the results, and it will almost certainly draw some natural links from local blogs and websites as well, meaning that any disadvantage from not having keywords in the domain would be quickly overcome.
But if you have a very new and small venture that no one knows about it may well be an idea to use keywords. Say you are an accounting firm in Subiaco. Research might indicate that including the obvious keywords "accountants" and "Subiaco" in the domain name might be a good move. It could draw in a small but high quality flow of traffic very soon. Unless you really built up the business and developed a very strong brand it could work well for a long time, even indefinitely.
That said, I think in most cases the best long term strategy would be to use the business name itself. It's the obvious choice, is easier to remember, and won't ever need to be changed (unless the business name itself is changed, of course).