Know your demographic. Talk to children. Visit a school, library or children's group to find out what their interests are. Ask about what their favorite books are and why those are their favorites. Get a sense of what they are interested in and think about how you can write a book that plays with children's interests. Browse the top sellers lists for children's books so you can get an idea of what works.
Decide what age group you'll write for--with each passing year, a child's reading comprehension skills changes and grows. Know what group your book will be written for and make sure you keep this in mind. According to Writing-World's website, lengths for children's books change according to the age group of reader. Small children have shorter attention spans, thus requiring a shorter book. Some older children (ages eight to 12) are able to read longer works, like R.L. Stine's popular book series, "Goosebumps."
Create an outline that pertains to your demographic. Note your main characters, the narrator's personality, the conflict, the resolution and setting. According to Writing-World, stories for eight- to 12-year-olds usually have a more complex story line and character development. Stories for four- to eight-year-olds typically contain a protagonist of the same age, simple and clear vocabulary, and a conflict that can be related to by the child. See Writing-World's article, "The Ages and Stages of Children's Literature."
Write your book, making sure the sentences are clear and vivid. Provide the child with some new words, but keep the vocabulary largely understandable. Make sure your plot is fully flushed out with a clear resolution of conflict and development of plot and character. According to Writing-World, the work should use active voice. For example, instead of writing "the bear was loved by Lucy," you should write, "Lucy loved the bear." Avoid excessive detail that doesn't need to be written. Make sure you cut any unnecessary words or details.