Narrow down the intended age group. Children's books can range from books that are meant to be read aloud to toddlers, chapter books for elementary age students, to teenage stories. The age level chosen will determine the length, tone and focus. Keep it as simple as possible. Elaborate plots and a long list of characters can be confusing to the reader.
Illustrations are important in children's books because they help the child better grasp the story idea. Remember that the illustrations must be consistent from the beginning of the story to the end. Illustrations should be simple and colorful enough to appeal to the bright nature of children and should directly relate to the story.
Ideas for characters can come from anywhere. Be observant of what is happening around you and keep a notebook handy to jot down descriptions of possible characters. Everyday living provides numerous opportunities to observe and reflect on people and situations encountered in daily life. Look at all events and ask yourself "what if?" questions. For example, if you observe two dogs walking side-by-side down the street, imagine that they are special friends---write a story from their point of view.
Visit the library or a bookstore and browse through various children's books for themes or ideas. Imagine similar characters in another setting. Look at picture books and try to create a story with words to fit the pictures. Consider writing a funny story about a single favorite character in a serious story. As always, take notes to be read later at your desk.
Think like a child. Write about your desires or fears. If you are afraid of insects or spiders, write about the fear. Why are you afraid? How can you overcome the fear? Could you write a story about a good situation with the spider as the hero? If you love peanut butter on everything, write a story about a child who eats nothing but peanut butter and describe what happens. Remember what it feels like to have a birthday party. Recall holding a soft, furry puppy in your arms.