Have your child write down the main points of the story she wants to tell. Ask about your little author's ideas -- what makes a good story and what kind of story does she think readers will find interesting? It does not have to be a detailed answer. Something as simple as "a girl finds a magic world under her bed" is sufficient. Then, have your child think about the main character and how she will fit into the idea. Children's book author Corey Green recommends that kids brainstorm three points: a sympathetic character who faces a problem and figures out how to solve it.
Most stories -- especially simpler ones penned by kids -- have a basic beginning, middle and end structure. Suggest to your child that he jot down notes on the story's basic premise. It can be as simple as three sentences that sum up each part, although one part should highlight the story's climax -- perhaps an escape scene, a big fight or a successful mission. This method helps your child know where he or she is going with the story, but still allows for changes. It also helps the child figure out how the main character fits into the outline.
Very few stories have one main character. Ask your child about people, animals or other characters the protagonist will meet along the way. Suggest that your child write down details about the secondary characters, such as how they connect to the main character, their personality traits and how they fit into the story. Remind your child that most stories have antagonists, and have him or her write down why the villain is so dastardly. This exercise can help your child brainstorm conversations for the characters or think up reactions to events.
Some children are better visual thinkers than writers. Encourage them to picture the story in their minds and describe it aloud. Then have your child write down the descriptive words. This allows "she rode down the hill on her bike" to become something more descriptive such as "her hair blew all around her eyes as she flew down the hill with her mouth open, screaming with happiness." Likewise, encourage your child to use action words. Ask her how a character does something, how the character feels or how the character looks. This can turn "she went down the street" to "she skipped down the block faster than a car."
Some plot devices are better uttered by characters and some are better described as narrative. Ask your child which he thinks is better. For example, some feelings, like anger or love, are better said by characters than described. But action sequences, such as an asteroid plummeting toward Earth, make more sense as a narrative and not a character saying what's happening.
Children usually have a lot to say and once their imaginations get going, their stories could take a dozen unexpected twists. Do not stifle this creativity by criticizing crazy plot points. Encourage your child to look at his outline for guidance instead. At the end of the writing process, talk over the story with your child and help him edit it, if necessary for something like a school assignment. If editing is vital, talk about the most important plot points and what could be eliminated that would leave the main story intact and interesting.