Short stories follow the same basic structure as novels. Each should clearly tell the reader:
Why: Why are you writing this story? What’s the point (theme)?
Who: Who matters in this story? Stick to 2 or 3 characters, and use them to advance the plot or theme.
When: When does this story take place? The time period affects how the reader interprets the story.
Where: Where is this story taking place? The setting should be vividly portrayed, but only include what’s relevant to the plot or theme.
Every sentence should have a purpose. Eliminate anything that doesn’t move the story forward, clarify the theme, build characterization, or establish the setting. Use sentence length and careful word choices to help set the pace and tone. Limit the amount of backstory you include, and stick to one point of view.
Short stories can range in length from very few words up to about 7,500 words. Some markets may take stories longer than that, but it starts getting into the novella range. Check the guidelines for the magazine or anthology you want to submit to for the maximum and minimum words they are interested in. If specific guidelines aren’t given, check the average length of stories they’ve recently published. That’s part of knowing your market, and will help you target the places that are most likely to accept your work.
Edit October 14, 2009: Editor Alan Rinzler has an encouraging post about short stories on his blog, along with suggestions for writing and marketing them. Take a look: http://www.alanrinzler.com/blog/2009/10/12/why-book-publishers-love-short-stories/
Is it easier for you to write short stories, or do you prefer writing novels? What are some of your favorite short stories?