To start a new site project, we first look at what the site needs to achieve, and create a site map. Special needs and/or features are discussed, and a time line may be created for parts that are needed immediately and parts that may come at a later date.
Then, we do a first phase of design, with emphasis on search-engine friendliness and accessibility by all web users. We usually do three initial design "roughs" for the client to review (generally these will be posted online at Coconut Moon, as will all future changes until the site goes "live"). Based on those designs, the client picks a direction to move forward with. We take the preferred direction and refine it, applying it to sub-pages (as necessary) as well as the home page.
Upon the client's approval of the refined design, we start production of the actual working web site. This follows the site map we set up in the initial phase, and includes forms, links, whatever content the client has provided, and any special features (e.g. shopping carts, content management system, Flash slide shows, etc.). We ask that all text be provided to us digitally; photos can be digital or we can do scans of prints.
The above is a simplification - that every site is different, and every client has different needs. We always try to work with what each client needs, and to be sensitive to the individual differences in every project.