Acquire the rights to adapt the short story. If you did not author it, you will need to obtain the rights to adapt the story. Get in contact with the author, whether it be through the publishing company that handled the book in which the story appeared, or speaking to the author directly if it is someone that you know.
Learn the difference between prose and screenplay formats. Many elements in prose simply won't work or translate correctly to screenplay. Learn how the two differ through screenplay books such as "Story" by Robert McKee, "Screenplay" by Syd Field, "Save the Cat" by Blake Snyder and "Screenwriter's Bible" by David Trottier which give a good foundation for the differences between the two.
Choose a short story that is visually descriptive. Film is a visual medium, and the more visually appealing the story, the more it will give you to adapt.
Select a starting point. With many short stories, they are an incomplete glimpse of a story, and do not have a cohesive beginning, middle and end. The starting point for your adaptation may be prior to the events in the short story, dependant on what you would like to achieve with the adaptation.
Create engaging scenes to carry the adaptation story arc. Without an interesting story, your adaptation will fall flat. Create scenes to carry the action in between the elements already in place in the story. One major difference is showing "immediate" action in screenplay as opposed to "summarizing" it in prose. An event in prose can be described in a few short words, but will need to be expanded upon for the screen.
Combine or tighten up the cast of characters. On screen, characters will need to be more concise in order to keep track of them all easier, as opposed to prose that can have many different characters inter-weaved throughout the story. Elements of characters may need to be combined into one character to free up some screen time.
Map out the flow of your story. When expanding, determine what the premise is of the story and if it will remain the same as the short story. Determine the main conflict and the outcome or where the story begins and ends and develop the various scenes that achieve the story arc. Finally determine the viewpoint of the story, following one central character or various characters.