Decide whether your book will be for toddlers, children ages 4 through 8 or middle readers (typically ages 8 through 12). Generally, picture books are 32 pages long, young readers books are 40 to 60 pages and middle-reader novels are 60 to 100 pages.
Visit bookstores and browse online book retailers. If the market currently is flooded with books about gnomes, this subject matter may not necessarily be popular with children by the time your book comes out. After a publisher offers an author a contract, it may take one to two years before the book is released. Certain genres usually stay popular longer than specific types of content and characters. For instance, fantasy novels as well as books that feature daring or unusual young protagonists have long been popular with children.
Buy a copy of "Children's Writer's and Illustrators Market," published and updated annually by Writer's Digest Books. The volume contains a directory of children's publishers and the genres they publish, and features almost 200 pages of articles on children's publishing. The directory will help you determine which types of manuscripts publishers are seeking.
Develop your characters. Fully fleshed-out characters, even more than plot, provide the basis of strong fiction. Even if your plot is riveting, readers may abandon your book if it doesn't include characters with whom they can identify. Children generally have shorter attention spans than adults and must be pulled into stories from the start. Create likeable main characters that take risks and have unusual characteristics or quirks. Books such as Louise Fitzhugh's "Harriet the Spy" and J.K. Rowling's Harry Potter series are successful not only because children relate to the protagonists but also because the protagonists are fully realized, have definite likes and dislikes and struggle with internal or external forces. Try to stay away from animals as main characters--unless they are extremely unique--as publishers often receive more of these kinds of books than the market will support.
Outline your plot. Don't just try to wing the writing process. Whether your outline is one paragraph or ten pages, it will guide you as you write. However, don't feel you must adhere to your original plot if new ideas come to you while you're writing. The key to a successful plot is to include multiple obstacles or conflicts that the protagonist(s) must surmount.
Enlist children you know for a focus group. Describe your characters and read your plot aloud. No one knows more what children will like than children themselves. Often, children's imaginations are much less restrained than those of adults, and your focus group can help you tweak your characters and/or plot.
Write your book. Schedule a certain amount of time each day for your project. Take breaks when necessary. Writers who take frequent breaks often come back to their projects with fresh ideas and insights and can view their work more objectively. After you're finished, show your book to your friends, family members and coworkers, or give your book to several children to read. Get feedback from as many people as possible and rework your material if necessary.