This is not just a question children may ask. Certainly, many newbie tellers ask, "How do you find stories?" There are many answers to the question. If we put aside, for the moment, folk tales, fairytales and other traditional stories, we are left with a variety of genres, including personal, fact based, family, etc. So where do these "non-structured" stories come from? The answer, again, is "many places".
I am told that the great Donald Davis writes in his journals each night. He jots down all the people he encountered, and all the places he experienced. Donald has always said that a story starts with people and places.
Many coaches and teachers tell us that we need to know what the story is about before we begin. More and more, I am not so sure about the timing of that. I believe that before we tell in front of an audience, yes, we must know that. But we may not know the real answer at the very beginning. Just as a new baby has no real idea of what they will become, or "grow into", stories can get started without knowing the outcome.
Be on the lookout!
For what? Be on the lookout for ANYTHING that will spur your imagination and creativity. It could be a melody you hear; a piece of clothing you or someone else is wearing; a shard of glass along the sidewalk; a curious sign in a shop; words that a passerby utters; a photo; the way two people are interacting in the mall...or anything that stops you for a moment and makes you think.
Be open to what is around you. A story may not come from one single element. Perhaps it will be the succession of three things happening one day. Perhaps it will be different pieces of advice that people have given you. Maybe it starts with you noticing the colors of the things around you, or the shape of the clouds. What are the connections? What are the similarities, or differences that could have some meaning for you?
You don't always have to "start at the beginning" or know everything about the story and the characters. Sometimes you just have fragments or pieces that you are not sure how they fit together. That is when the creativity and crafting begin. Trust the process, and don't be too impatient. It may take time for the images to coalesce.
Wait and see all of the things that come out of that magic hat...then take your time to decide...what could they be? What story would they tell?