You should first brainstorm, look at your web logs, use keyword tools, then look at the volume of competition using a tool like WordTracker. From there select phrases/keywords to optimize for that are relevant to your website and have a high KEI.
First you should analysis your competitor's site through that you can get idea for keywords. After that for finalize your keywords you can use different types of keyword suggestion tool like google adwords keyword tool, google insight for search. It will very helpful for you.