Decide whether the character is good, evil, neutral or a strange mix of the three. This decision alone will help create the foundations for the character. Think of allies and enemies this character has.
Give the character a race. There are many races in "Dragon Ball Z," with the humans, the Namekians and the Saiyans being the most common. Each race has its own strengths, weaknesses and abilities. Decide which of these attributes you want your character to have.
Decide what the character will look like. The Namekians are green, so if your character is a Namekian, he should be green as well, although this does not have to be the case if you give a good explanation. All the characters in "Dragon Ball Z" have very striking and noticeable features that your character should possess, as well. Writing down what the character looks like will help your readers visualize them.
Create the backstory of the character. What happened to it before your story and what motivates your character will be the focus of this part. You can include any time your character met another character from the series or whether one of its actions from the series affected it.
Add relationships with other characters from the canonical series. While you may have touched on this in the backstory, go into it further. Be sure to make notes on how the relationships will change and any new ones that will happen in the course of your story.
Establish the personality of the character. Think about how the character would react in a given situation as well as all of its personality quirks. As an exercise, create a short story about the character performing a mundane task such as going to the grocery store. Write down all the character's minor actions and thoughts as it goes about the task. For example, if your character went in to get a gallon of milk, does the character head straight to the milk or does it walk around and get distracted? Each action should be tied to a personality trait.
Decide where your character and its story will fit into the main storyline. You can put the character in a canonical arc such as the Freeza Saga or create your own arc. Different things happen in the different arcs and the characters will have gained abilities depending on the part of the story. For instance, if your story takes place right after the Saiyan arc, Goku has not yet gained the ability to go Super Saiyan. Keep these facts in mind when you create your story. You could also blatantly ignore these facts and create an "alternate universe" where things happened differently.