Some of the best films started as short stories. The list includes "2001: A Space Odyssey" which was based on "The Sentinel" by Arthur C Clarke. "High Noon" was based on "The Tin Star" by John Cunningham and Hitchcock's "Rear Window" was adapted to the screen from a Philip Dick story called "We Can Remember it for You Wholesale."
Read the short story you plan to convert and answer these questions: What is the setting? What happens? What are the characters about? What's the protagonists' agenda? Remember, however, that the story you choose is a good choice. Some short stories are best left as short stories.
Begin thinking that you wrote the story. Remember, this is a transition and you owe nothing to the author. What I mean is that you can add or change the story as much as you want. The story becomes "yours."
Decrease the story to a series of events, then reorder them to suit the needs of your screenplay. It's a good idea at this point to start making storyboards. Make a picture for each exchange in a scene.
Start editing events in the short story that cannot be visualized in the screenplay. Remember, this has become "your" story. Feel free to edit whatever you feel to fit the screenplay.