Incoming links, also call backlinks, inbound links, or "links from other sites", are one of the primary means by which Google (and many other search engines) ranks websites. There are four ways in which incoming links can affect your website.

1. Link Quantity. Google assumes the more incoming links a website has, the more important it is and therefore it should get ranked higher.

2. Link Quality. If Google thinks Website A is important or of high quality and gives it good rankings and Website A links to Website B, then Google also assumes Website B is important. This idea is often referred to by the informal term "link juice." The more juice a site has, the more it can pass on to other sites it links to.

3. Site Relevance. Third, if Website A which has a lot of content about Topic A, and Website A links to Website B, then Google will assume that Website B also has something to do with Topic A.

4. Link Relevance. Fourth, the text of the incoming link matters. In the case of your site, you want incoming links that include the keywords you're optimizing for. That being the case, the more incoming links you can build, the text of which includes your keywords, the better. This is because when Google follows a link from Website A to Website B, it reads the text of the link on Website A and assumes, quite logically, that Website B has something to do with the text contained in the link on Website A, and therefore Website B is going to be ranked higher for a certain keyword if it has lots of incoming links that contain that keyword.

Unfortunately, but logically, most of your incoming linktext is going to be either the name of your company, or a url. These are not bad links, they're simply links that aren't living up to their full potential.

To sum up, the ideal incoming link comes from a high-ranking website related by topic to your website (i.e. the other website already ranks for the keyword(s) you want to rank for), and the text of the link from the other website to yours would contain the keywords you want to rank for.

It's one thing to understand why building links is important, and quite another to figure out how to do it effectively. There are three primary ways to build links:

1. Create your own links. Do you own any other websites other than the one you're focusing on? There's an easy place to start. If you don't have any other websites, have you considered building some? Here are just a few of the websites owned by our parent company MWI which are used for SEO purposes.

Salt Lake City SEO
The Organic SEO
Don Loper - Adventures in Entrepreneurship
Web Design Blog
My Web Design Company
Bad Billboards
Skateboard Blog
Utah Web Development Firms
Utah Internet Marketing
Utah Web Design Firms
Utah Advertising Agencies
Utah Firms
Laundromat Directory

Of course this requires a bit of work and so I wouldn't consider it one of the first things you should be doing, but it's definitely an option. And there are more reasons to do this than just SEO. SEO just happens to be one of the benefits you get from it and so it can add some extra motivation.

You can also create your own links by posting on websites such as blogs and forums. It doesn't take too much effort to create an account and start posting. Many forums require you to be registered for 7-10 days and/or require you to post at least 10 times before they will allow you to insert live links in your comments. Still, it's a fairly easy way to go. To find good forums and blogs simply search for some of your keywords + "blog" or "forum" and see what comes up.

Creating your own links is not the easiest way to get links, nor is it the best way, but it's something you have almost complete control over. And I'm barely scratching the surface here. There are hundreds of other ways to create your own links.

2. Recruit links. This is the best way to get links, but can also be the hardest, and brings us to the terms "linkbaiting" and "linkbait." Linkbait is content that is so very, very interesting that lots of people want to see it and lots of people want to link to it. It could be textual content, but it can also be videos, artwork, resources, or what have you. It's just anything that is super interesting and/or useful. Focus on the word "useful" rather than interesting. If you can create parts of your website that are truly useful, and free, then you stand a decent chance that people will start linking to it. Use websites and/or tools like Digg, Stumbleupon, and del.icio.us to create links and attract others to do so as well.

3. Buy links. This is the easiest way to get links, but not the best way, especially with Google encouraging people to snitch on each other about paid links. Still, it's easy, and it can work. Two "link brokers" we trust are http://www.text-link-ads.com and http://www.textlinkbrokers.com/. The latter tends to be a bit more expensive, but you often get what you pay for.

You can also buy links by signing up in paid directories. Some of these directories are paid and some are free, but may require more work than the paid ones.

This should be enough to get you started building some links. If you really want to dive into it consult SEOmoz's Professional's Guide to Link Building.