Choose a narrative point of view. You can write your story as if you were one of the characters (first person), as a detached narrator who presents just one character's thoughts and observations (third-person limited), or as a detached narrator who presents the thoughts and observations of several characters (third-person omniscient). A first-person point of view will refer to the central character as 'I' instead of 'he' or 'she.'
Create a protagonist, or main character. This should be the most developed and usually the most sympathetic character in your story.
Create a problem, or conflict, for your protagonist. The conflict of your story should take one of five basic forms: person vs. person, person vs. himself or herself, person vs. nature, person vs. society, or person vs. God or fate. If you choose a person vs. person conflict, create an antagonist to serve as the person your protagonist must contend with.
Establish believable characters and settings, with vivid descriptions and dialogue, to create a story that your readers will care about.
Build the story's tension by having the protagonist make several failed attempts to solve or overcome the problem. (You may want to skip this step for shorter stories.)
Create a crisis that serves as the last chance for the protagonist to solve his or her problem.
Resolve the tension by having the protagonist succeed through his or her own intelligence, creativity, courage or other positive attributes. This is usually referred to as the story's climax.
Extend this resolution phase, if you like, by reflecting on the action of the story and its significance to the characters or society.