You will need a good web stats package which should be supplied by your web hosting company.
AW Stats is one of the best in this department.

You should be keeping track of:

1. The amount of unique visitors.
2. The amount of pages each visitor opens.
3. How many times a unique visitor returns.
4. The length of time spent on site.
5. The "landing" and "exit" pages.
6. Referring sites.
7. Bookmark frequency.
8. Search terms used to find your site.
9. Position of your search term in the individual search engine.
10. Which search engines spiders visit your site and how often.
11. Where visitors click on your page.

1. Unique visitors is an overall scale to measure the popularity of your site.
   Use this in combination with #11. A free heatmap tracker is available at www.crazyegg.com
    
2. The amount of pages each visitor opens tells you how you are doing in capturing the visitor's attention and curiosity.
   On a site with a lot of information this can run to 10 or 11 pages.
    
3. Returning visitors is a good measure of a popular site.
    
4. Length of time spent on site is an indication of the worth of your landing pages.
    
5. Landing pages will show you how your marketing campaigns are doing. (You should have a separate page for each).
   Exit pages are an indication of why a visitor leaves. (Not enough information, information found).
    
6. Referring sites are an indication of your PR popularity. These links should be in your primary contact category so that you may keep the site's webmasters updated on your products and services.
   A well referred site will usually show referrers vs. search engine ratio of around 30%/70%.
    
7. Bookmark frequency is a good indication of how well your site is regarded. On my DotCom-Productions site I have a bookmark frequency of 44.4 % with 85.4 % of returning traffic coming from bookmarks.
    
8. The search phrases used to find your site is an excellent indication of how you are doing in the search engines.
   If you use the "Extreme Tracker" (http://extremetracking.com) you can go directly to the search page visitors used to find your site.
    
9. Finding the position of your site in the various search engines can be difficult as it is necessary to do individual searches for each keyword phrase.
   There are automated programs available but as Google states that it does not like automated scripts hitting their data centers, I would not use them.
   The Extreme Tracker above has a page (Referrer Tracking 1 - Scroll down to "Last 20 Searchengine Queries"), that will show you the last 20 search terms used to find your site.
   Clicking on the active link beside each term will bring you to the exact page and data center that the user was at when they clicked on your listing.
   (E.G. 21 Apr, Sat, 09:36:15    Google:  hmtl site  is a listing on my site's extreme tracker. If you click on the "Google" link you will see that my site is #1 for the search term. You will also notice that "html" is written "hmtl" in the search phrase. As this is an often made typo it was written on purpose.)
    
10. Which search engines and frequency of their visits is a good indication of the "trust" they impart to your site.
    Keep adding content to keep them coming back.
     
11. Where visitors click on your page is a great help in setting up your pages for the highest conversions.
    Below is a heat map showing clicks for my Fantastic Machines website.
    Notice that people prefer to click on links in the page rather than on the menu items. (Top left).

While mainly for larger businesses the article "Avoiding the Most Common Web Analytics Pitfalls" has some good information for the small/home office business.

http://www.clickz.com/showPage.html?page=3624889 

Next week - Week 9 - Think you are finished?  Think again. Adding content.