Avoid teaching the child at what is called frustration level. The term is self-explanatory, meaning if a child is becoming frustrated and showing no progress move down a level. Negative movement is regression and will only impede the learning process.
Read to the child. This demonstrates the process of reading and provides a learning sample for them. Read lots of simple books and pronounce each word clearly. Let them touch your lips or watch as you pronounce the words, again showing them how the process works.
Teach the basic sight words. There are numerous websites that provide sight words or go to a teacher, most are happy to provide a list of sight words. Practice these words over and over again because they form the base of reading.
Encourage the child to use pictures in the book to sound out words. A child will spot sight words and should know them, but they will use pictures to pronounce unknown words, encourage this skill.
Work with phonetic chunks such as "sh"," ou" and "ow." Like sight words phonetic junks help build a base for reading skills and can aid children in sounding out words they do not know.