1. Know your audience - What group or age are you writing for? Now go to the library and max out your card reading in that range. Classics are great, but be sure you are reading things that are from the last 5 years or so. These are what are being purchased by publishing houses today.
2. Find your people - If you are a kid lit writer there are organizations that you can join such as the Society for Children's Book Writers and Illustrators, also known as SCBWI.
3. Get involved - Now that you've joined a group, go meet people, attend a conference, dive into the online community, find or create a critique group.
4. Critique Group or Swaps - We become blind to holes in our stories because our brain fills them in. Others that give constructive and supportive critiques will help you grow as an author. Plus, these are your people. They will cheer for you when you succeed and commiserate when things stink. Don't know where to find critique partners? See #2. Organizations like SCBWI have regional divisions that can help you find local writers and an online forum where you can meet writers all over the world.
5. Have fun - Writing and Illustrating is magic. Don't forget you are making things appear out of thin air (or you know - getting words from your mind onto paper). Traditional publishing can be daunting but you should enjoy the journey. The Journey is looooooong....
6. Be patient - Publishing is slow. Even if you sell a book today it could be a year or two or more before you hold it in your hands.
7. Keep writing - Publishing is slow. Good thing we have our next Work In Progress to keep us busy.