What networks are you advertising on? Mobile or desktop? What are your keyowrd match types? Are you using mostly broad match?
A lot of times, this means the keywords are a bit too broad and are bringing you clicks from people who thought they were getting something else. If you are using broad match, my initial advice is "stop doing that"! Let's assume you are using broad match. Go to the keywords tab for your account. Select keywords that have clicks, then run a search terms report on those keywords. You will see the types of queries that brought people to your site. If those queries are way off target, consider adding them as phrase or exact match negatives.
Once you have done that, I would suggest you convert all your broad match keywords to BMM--put a + sign in front of each work with in the keyword. This will limit the number of unrelated queries that trigger your add.
Ok, now that you have the right people coming to your web site, take a close look at your landing page. Is your offer clear? Value proposition? Is price a deal breaker? Is the page well designed and look professional? Do you have trust marks on your pages (trust is important)? Do you collect user data on your web site, or is it call-in only? Is your call to action prominently placed on the page? Is the phone number a major design element on the page?
There is a lot to look at. Never budget more than you are willing to lose when first starting out. Sometimes it takes a while to get everything tuned just right. And some businesses will not find success with AdWords, no matter what they try.
Best of Luck!
Thanks for your question. Pete has given you a lot of really good ideas there, and I'd definitely recommend running a Search Terms Report as Pete mentioned.
One thing I would mention in addition is that Google takes invalid clicks very seriously and invests a lot of time and effort in making sure these do not affect your advertising. We monitor the quality of click traffic to make sure no invalid clicks fall through the net and affect your advertising. This link explains in more detail all the varied ways we protect advertisers from invalid clicks.
Hope this helps! Good luck with your campaigns!