In order to take the right steps towards a better position on the search engines, you must first identify exactly what your website is offering. Once you have a good idea of what that is, you need to cut down your idea to just a few words, literally. A search engine doesn't use a full-page public relations newsletter to index sites--it uses words and short phrases. If you are not sure about what words or phrases best describe your site, look at it from the user’s perspective. How would they find your site? What search words or phrases make sense? The importance of these choices cannot be emphasized enough.
The keywords that you choose will dictate the life or death of your website. When you choose your keywords, you need to be able to compete with them. It is unrealistic to think that a young and small company's website could rank number one on keywords like “Software”, “Books”, or “Sex”. Larger, more established companies who have been on the Internet for several years are not only much more well known, but also have links to them from many other websites. These links give credit to the larger companies and allow them to compete on such general words--engines see these sites as a reliable source. That credibility is established over a long period of time through affiliate programs, alliances, link partnerships, and other similar programs. By submitting your site to link directories, you can increase your "Link Popularity", and slowly gain similar credibility, as more pages across the Web take notice of you and link to your site. Hopefully though, you will be using more specific keywords than the ones mentioned above.
The fact that most people do not query search engines on single words such as “Books”, or “Fish”, works in your favor. Users are more likely to search for something more specific like “Cook Books”, or “Monk Fish”. The first step, then, in choosing the right keywords, is to make them specific. You can also be more specific in your keywords by narrowing down your geographic location. For example, if you're a dentist in Washington, you would be most interested in attracting web site visitors from the Washington area. Washington Internet traffic would also be more likely to visit you, rather than a dentist in another state. So you would be best off picking keywords like:

                                           Dentists WA
                                    Dentist in Washington
                                           WA dentists
                                     Washington Dentist

You also have an excellent chance at ranking well on keywords that are closely related to the main subject of your site. For example, if your website subject is gourmet foods and culinary arts, you might try targeting related keywords such as “Vietnamese cinnamon” or “Cajun spices”. The point is, people looking for these items are probably interested in cooking as well. Furthermore, the competition for these keywords is much less intense than for “food”, or “Cooking”. You have a better chance of getting an excellent position using focused and targeted keywords such as these. There are other opportunities as well, such as taking advantage of misspellings.
Misspellings of keywords should be seriously considered for targeting. People very frequently misspell the search phrases they use on search engines. If a particular keyword for your site is difficult to spell (Australopithecus afarensis, anyone?), or you are aware of common misspellings for your keywords, be sure to include them! As crazy as this sounds, many websites already do this to great success. Remember, getting a number-one listing on a misspelled word can be very easy and rewarding in terms of traffic.
Deciding on the correct keywords can be the most critical decision you can make regarding the success or failure of a website. The keywords chosen must be specific and narrow in their meaning. Picking related or misspelled words is also a viable option. Geography should be used to your advantage as well. The Internet may be a new business medium, but the same rules of basic survival apply--websites that don't take advantage of every opportunity will be surpassed by the ones that do.