Examine the garage you have in mind and make note of where your water and electricity sources are located. Note any exterior doors or locate where one might be made for best entrance. This can be a converted window or a removal and modification of the existing garage door.
Picture the enclosed space with built-in bathroom and kitchette. Is there space enough? Bathrooms can have only a shower, basin and toilet and as such can take up one corner of the garage. Kitchenettes can be a small counter with sink, an apartment size refrigerator and only counter-top cooking (two-burner hot plates and microwave).
Look at the ceiling of the garage. Are there open rafters? This is not a problem, this is a plus. You can leave open space with exposed beams (to be painted white or cream) and cover the roof and walls with sheet rock. The exposed, painted beams will add tremendous space and interest to an otherwise limited area, giving it a feel of it being much larger than it is.
Move a hot water heater to the outside in a closed but accessible structure against the house, or move it to the main home if there is space. Take out any washers or dryers and perhaps create a separate washing area outside the home if possible. The same area that encloses the hot water heater could also house the washer/dryer.
Raise the floor level to the level of the main home if needed with concrete. This may or may not be needed as part of your requirements to meet building standards.
Expect that as conversion progresses, that you will be inspected by your local building permit office each step of the way. They will advise you and make sure that all changes are according to code.
Consider adding an additional wall across the wall that adjoins your house. This additional wall can be soundproofed. In addition, the adjoining door (which zoning will insist be left intact can have a closet (or other soundproofed space) built around it with a functioning door. This allows for compliance with building codes but affords the person living in the conversion privacy from sounds from the main house. Adjoining doors can be locked from both sides. You cannot seal up a wall in a single family dwelling to make a separate unit if zoning is only single family.
Leave electrical breaker boxes in the conversion if possible, as relocating them can be expensive. You can replace old boxes with new which can lie flush with the wall and can be covered with a picture or pseudo cabinet.
Find a contractor to do the whole job or contract it out yourself, separately (for plumbing, electrical, etc) or do part of the work yourself if you are able, to save money.
Consider additional enhancements such as windows, pretty carpet, ceiling fans or outside upgrades for walkways, etc.