Hi Nicole,
I'm no pro, but I don't think you have to worry so much about the competition for your main keyword as much as you do for all your secondary keywords. I'll use myself as an example.
My site is all about chocolate candy. The main keyword "chocolate candy" has huge competition. But when I did my keyword research, I also looked at the supply and demand for hundreds of secondary keywords that would be keyword focused content pages off of my home page. For instance,
chocolate candy recipes
chocolate candy making
chocolate candy molds
party favors
chocolate fudge
chocolate fondue
chocolate gift candy, etc.,
You get the idea? If I can rank well enough for a lot of the other keywords, I won't have to worry so much about my homepage keyword.
I admit that the process of figuring out my niche site concept was made simple for me because of the program I am with called SBI. They have some really neat Brainstorming tools and step by step advice to help you narrow it down to the niche that is right for you. Anyone who knows me, online or offline, knows I'm crazy about SBI - ha ha. I know I wouldn't have had much hope of figuring all this stuff out on my own.
Anyway, I hope that helps you decide your niche. Maybe someone else will chime in soon with more specific advice on exact numbers and recommendations. I just wanted to point out that it is not just your main keyword, but the bigger picture.
All the best.