
Although it's a common assumption that you would target everyone on the internet, this is not generally true. If you are creating a family site for sharing pictures or creating group discussions, chances are only family members are going to need to know the website address. Your really don't need a lot of high-powered, costly features that a business site doing ecommerce might.
If your business is more of a local or regional business supplying services or products that customers will need to view in person and you won't be shipping, then you don't need to target the world, but rather a local audience. An example might be a new car dealer.
If your business could conceivably supply products or services to the world, are you going to design the site in multiple languages or are you just targeting the English speaking world?
Once you have established your general target audience , you need to determine who would benefit (besides yourself) by coming to your site. The nature of demographic research is too broad to be discussed here, but ultimately it would be nice to know what people would be expecting from your site, and be able to deliver that content. This is obviously much more critical if you are selling products. If however your website is another marketing tool for your existing bricks and mortar business, part of an overall marketing strategy, you may wish to have just a few pages talking about your business, your products, why people should use your services, the area your service and how to contact you.
One of the biggest questions you need to answer, as this will determine in part your web hosting requirements and site design, is whether you want to be found, or is it necessary for your site to be found from the major search engines. Before you automatically jump in and say yes, of course, know that it will definitely change how your site will be designed and you will have to spend money and some time getting your site listed. It is no longer like the good old days of the internet when you could get into search engines at the drop of a hat. Most want content that is not already covered by other sites; content that will enhance the experience for internet searchers. Do you have unique content in mind?
Obviously your design approach and hosting requirements would be dramatically different if you were creating an interactive educational site for 6 year olds as opposed to selling auto parts.
Think about how people are going to know about your site.
Your site may be a combination of the above. Be certain to first decide who you want or need to see the site, how will they find it, and what they would expect from it.