The people in your story comprise the component of story writing that you should know best, as if the characters are real people who you are introducing to your readers. You should know how they talk, what they look like and how you feel about each of them. You may also need to know their "backstories" -- the things they experienced, alone or together, before your story began. Backstory tops the list of things you need to know but may never explicitly use.
Who will tell your story? If it's just one of your characters, you must be careful to limit the story to what that character knows and experiences, though it needn't be in first person. This character may learn of what other characters do, but at the same time as the reader and in the same way, secondhand. An omniscient third-person narrator is the easiest to maintain, but may be boring because it lacks the emotional dynamic of a character. Alternating POV among two or more characters can be interesting, but works best when the story hinges on comparing characters' perspectives.
Even if your story is set in a fictional place in a generally contemporary society, you need to know your way around so that you can show your readers. If you use anything real, take care to research it thoroughly. Walk the streets. Listen to the ambient sounds and take in the smells. The accuracy of your setting can cement or shatter a reader's trust in the world of your story.
What will happen to carry your story from beginning to end? It's often referred to as the story's "arc," and that's a helpful shape in which to picture it. Show what happens, though, don't tell it. Especially in a short story, dialogue is a way to reveal characters at the same time that you advance the plot. They can also throw in bits of backstory.
A great first line can establish character and setting, and get the plot going. Establish as much as you can, or at least start your reader wondering enough to read on. In a longer story, you may have the opportunity of first lines for all of the chapters, though none of them will match the importance of the opening of Chapter 1.