I have a nebulous germ of an idea and I feel the mood of the thing. Mood is key to make me want to write the thing. I've started hundreds of pieces that just lie down dead after a few paragraphs or pages. They go nowhere because I don't feel anything for them.
I hardly have characters in mind at this point. If anything, they're just placeholders. Given the idea and the mood, I figure out what sort of interaction between characters would evoke such a mood and I start writing dialogue or rudimentary direction. If I have more than one interaction in mind that will capture the feeling for me, I write the dialogue for each one. They're like lines from a play. There isn't necessarily an order to these pieces yet. The characters are being created line by line and any words they say, any movements they make, all go toward making them who they ultimately become.
An order sort of suggests itself as I go and I write any connecting bits as they occur to me. Throughout the process, I'm throwing in whatever cool ideas I want to throw in, whether they're details, lines or situations. A narrative is starting to form, partly guided by the developing characters. By now I have a rough idea of the beginning, middle and end of the story.
After I've written as much as I can think of and added enough detail to put some meat on the skeleton, I call it a first draft. Even if there are holes or entire scenes missing because I can't yet think of anything to write in those places.
Then I outline. Yes. After the first draft. I write down a sentence for each scene or key interaction and bullet point them. This way, on a single screen, I can see the flow of the story, the order of events, the number of scenes and what chunks are missing. Now I can see if scenes need to be rearranged, where the action is happening, which character is really the focus and what sorts of scenes I need to fill in those holes. I can also see if there are extraneous characters or scenes which can be collapsed into single characters or scenes.
I make any changes according to what I've discovered in the last step.
I rewrite, making it as close to a finished story as I can.
I send it to friends and fellow writers and ask them to tell me what works for them and what doesn't.
I go over their feedback and follow the advice with which I agree or set aside that with which I don't. Consensus is an important part of this. If one person says a character's action doesn't make any sense, that's probably not a real problem. If many people say that action doesn't make sense, I need to fix that.
I rewrite to fix any issues. Bang. I've got myself a story.
A few months ago I came up with a list of points of what, in my opinion, makes a great story. You're welcome to agree or disagree. I'm showing them to you in case you can get anything useful from them, not to start an argument.
A Story Well Told needs:
1. A Killer idea
2. A beginning that drags you in
3. To be told with Excitement and Crackling words
4. An emotional aspect
5. Characters that you believe are real people
6. An ending:
a. The reader doesn't expect
b. That makes sense
c. That hits home
I hope something here helps you. Good luck.