Create fully developed characters. Even though you may never fully divulge all the details of your characters' lives, you need to understand their condition and what makes them tick. This means you need to take some time and sketch out a background for each character. Record everything from the basics, like name and job, to the more obscure, like favorite color and secret phobias.
Once you've created fully developed characters, you can give them dialogue that fits their individual style. That is, what a character says must fit with his or her background and distinct personality. Try to avoid overuse of the word "said" when writing your dialogue. Switch it out for other more descriptive words, such as yelled, whispered, blurted. Add descriptive actions before or after your character speaks that imply how he or she is feeling instead of telling the reader outright.
Construct a plot that has a beginning, middle and end. There must be an incentive for the character, and it should be provocative enough to grab the reader's attention. You then need to think about the conflict that the character encounters along the way. The conflict, or complication, ultimately leads to the story's climax. Create a climax that is caused by everything preceding it and that affects everything that follows. Finally, write a resolution that solves or resolves the original problem.
When you write, describe a setting that has multiple levels and textures. Fully express what it is you see in your mind, and attempt to make that into a world that the reader can experience firsthand. Be sure to include all the senses we use to interpret our surroundings: sight, scent, sound, taste and touch.
Incorporate a theme into your story, that is, a central idea or insight. Your theme should be expressed as a statement, rather than just a single word. For example, instead of just "Desperation," it should be something like, "Feelings of desperation in Post-W.W. II America."