Most children have a natural creative streak, but as anyone who has tried it knows, getting an idea out of your head and onto a piece of paper can be very challenging! Spark the children's imagination by providing them with questions about their story before they start writing.
Start with the entire group and brainstorm or read a non fiction book about a particular subject (ex: penguins). Divide into small groups and give them questions to consider (ex: Where will the story be set? Who will be your characters? How can we make it really interesting? What juicy words can we use?)
Write a rough draft: Use lined paper to print a rough draft of your story.
During self edit, it's best to read your story through editing for a
different component each time (in other words, don't try to fix your plot
development and your spelling at the same time).
Use full page or half page templates to print your story. Add illustrations.
You can do a cooperative project by having one student act as author and another as illustrator. Having a Picture Story Board for the author to give to the illustrator can help the process. Or you can have the children swap authored books and let them illustrate each others. Having a different author/illustrator teaches the children how people collaborate to publish books.
Provide shelf or cabinet space for a classroom library. Allow the children to add the final draft of their books to the classroom library. The children can then read each others works during quiet reading time.
You can expand the project by having the children write "book reviews" of each others books. Make sure the children are instructed to use the "3 stars and a wish" method when they do their reviews to prevent hurt feelings -- each book review should consist of 3 positive comments and one "wish" (constructive criticism). It should also include the title, author and illustrator of the story.