Story to fiction

Teresa Nielsen Hayden posted a formula for turning a story into fiction; I'll quote it here:

A simple four-item formula for turning story into fiction
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The execution may get complicated, but the basic maneuvers are simple:
1. Move and keep moving. Tell the story you want to tell without shilly-shallying around. Move your characters out onto the board, get them into interesting situations, and have them do big, consequential things as early as you can. Then, continue making situations interesting, and keep the big, consequential actions coming.
Note: Strong characters who assess, decide, and react quickly are especially good for holding the reader’s attention. Our eyes are naturally drawn to objects in motion.
2. Make it consequential. To the greatest extent possible, have later events be caused or motivated or shaped by earlier ones. Every causal or consequential link you can build into the story is a steel cable holding your narrative together. When you can’t find any way to link an event via consequence, see whether you can link it thematically to what has gone before.
3. Recycle your characters. Give preference to characters already used in earlier episodes, or to characters connected with them, when you’re peopling later events. Characters are made more interesting by being reused, and it increases the overall consequentiality of the story. One-time single-purpose characters are occasionally necessary, but they don’t support as much weight.
Cherish your good secondary characters. They’re infinitely useful.
4. See if you already have one. Whenever you need something new — prop, plot thread, setting, minor character — go back through the parts of the story you’ve already written and see whether you can find it there. It’s surprising how often the exact thing you need is already sitting there in plain sight.
And that’s the lot. Nos. 1 & 2 are slightly more important than nos. 3 & 4, but they’re all important. The more you can lard on the consequence and connection, the tighter your fiction will feel. It’s a much better way to create structure than by nailing some shopworn hugger-mugger plot onto the side. A story can be arbitrary when you first make it up, as long as it pleases you; but when you turn it into fiction, the arbitrariness has to go away, because it’s the great enemy of reader interest.
Which brings us to the invisible fifth item: cool stuff now, more cool stuff later, even cooler stuff at the end. You love the story because it’s yours, and because you know there’s cool stuff coming. However, the reader doesn’t know that, so lay on the cool stuff now. Don’t be stingy. You can always make more.