Audition as many kids as possible. Try to include a balance of talent acts. Categories may include singing, playing an instrument, dancing, magic tricks, reading poems or telling jokes. The wider variety of acts you include, the more kids you'll give an opportunity to perform.
Find a location to hold your event. A church may be willing to host your talent show. You also may be able to ask a school official for use of the school's gymnasium. Some local organization or even local Boy Scout or Girl Scout troops may be able to help, not only with location, but with kids for your show
Hold at least two full rehearsals with all of the performers present. This will not only give you a chance to time the show out, it will give the kids a chance to work together and build their confidence level. Try to have a pianist or guitarist to accompany singers and dancers; performing kids can use the instruments as well. Also keep a selection of music CDs on hand for those kids who want to dance but don't have a music selection.
Create a simple flier on your computer for kids to pass out to family and friends. Pass the fliers out at least two weeks in advance if possible. This will give parents time to plan to be at the talent show. You want as many friendly faces in the audience as possible. Having parents in the audience can make a child feel especially proud and confident.
Videotape the show so that the performers and their family members have something to look back on later. A video DVD of the show can be a keepsake the young performers will treasure for a lifetime.