Understand the clients goals
We don't guess at why or how our clients want to become successful online ... we ask them.  They tell us.  We listen.  Then, we build the website they need to accomplish the goals they communicate to us.  Still, the first part of any of our processes is to find out as much information we can from our clients about themselves and their business.

Understand our clients' competition
Interestingly, yes, we go out, do our own research, and analyze our clients' competition.  How can we attempt to build a better mousetrap if we don't know what the best mousetrap looks like?  We look hard at these competitors, what technologies they employ, what volume of business they are doing, their design angles, and much more.  Then, we set out to best them.

Build Wireframes
Once we have all the information we need, including client inputs, branding information, competitor analysis, and our own creative vision, we lay out the pages to be later designed by our creative partners.  We don't try to make everything fit on a page, and we don't even assume that we (ourselves) can understand appropriate color palates...that is for our designers to determine ... they are experts to that end.  We use the wireframes as a guide in order to build our sitemaps, give early indication of direction and progress to our clients, and to properly and professionally allow our designers to engage our clients with good design ideas.