Creating Characters

All stories revolve around characters in scenes.  Good, well defined characters are essential for a good story.  People need to engage with your characters and care about what happens to them, whether it's a villain getting his just deserts or a golden hero rescuing a damsel in distress. You need to know your characters inside out, know what makes them tick and what is their motivating or driving force.
A good way to build on your characters is to create a character profile for each one. List their physical descriptions, dress sense/or lack of , horoscope sign, favourite food/drinks, hobbies/interests. Any past issues/baggage, work life, home life, marital status, general likes/dislikes, pet hates and idiosyncrasies. All of these things will help to define your character.
You will probably find as you begin to visualize your characters that you will draw on people that you know from real life as well. It's not wise to portray a caricature of someone you know if they are able to recognise themselves or even think it may be them as they could take offence. However without intending to you may find that your characters become an amalgamation of people that you have known, past and present.
People watching is another good way to inspire character development ideas. Keep a notebook to record observations and snippets of conversations that you overhear when out and about as they could become the inspiration for creating a character. When you have your character put him/her in different situations to see how they react. What type of temperament have they got?
List your character's traits, if they are good guys list two good traits for every one bad trait. Do the opposite for a bad guy, two bad traits for every good trait. Finally believe in your characters and if you have constructed them well, they may well write the story for you as they react true to form in the scenes that you place them in.