Most good stories start with a fundamental list of ingredients: the initial situation, conflict, complication, climax, suspense, denouement, and conclusion. Great writers sometimes shake up the recipe and add some spice.
Exposition
Sara Starts School (And Owns It)
Here's our opening scene: Sara Crewe is a "little princess": rich and doted upon by her father. When her dad drops her off at a boarding school in London, it looks like Sara will continue on her path of privilege and dazzling everyone in sight with her excellent French skills and fanciful tales.
But that wouldn't be much of a story, so we know that we're in for some …
Rising Action
A Death in the Family
Things start to heat up when, on Sara's eleventh birthday, she gets the news that her rich papa is dead and broke. Sara goes from riches to rags in about thirty seconds, as Miss Minchin banishes her to a small attic room and turns her into a drudge. Her life consists of running errands, doing chores, tutoring the younger kids, and getting yelled at. Meanwhile, we see that nothing can touch Sara's innate goodness: she's still as nice as can be to everyone she meets, including the Indian servant of the mysterious Indian gentleman (as in, British guy from India) who moves in next door.
Climax
The Magic
Welcome to the worst night of Sara's life: she gives away almost all of her food, she's denied dinner for coming home late after running errands, and then Miss Minchin catches her having a sad little party with Ermengarde and Becky. The punishment? No food tomorrow. She goes to bed a sad, hungry little girl.
Surprise! While she's asleep, the Indian servant sneaks in and gussies up her crib with all sorts of nice, warm stuff—including food and a nice, warm fire.
Falling Action
A Princess is Found
Thanks to her magical visitor, things get better and better until, one day, Sara finds the neighbor's monkey on the roof. She brings it back to the Indian man's house. Surprise again! He's actually her father's business partner, and he's been looking for her this whole time. And guess what! She's super rich, and she never has to go back to the stinky boarding school again.
Resolution
And She Lives Happily Ever After, Of Course
At the very end, Sara is back to living in comfort with Becky as her pampered servant (or however pampered a servant can be). Tom Carrisford, her father's business partner, recovers from his illness and dotes on Sara just like her daddy. She gets to make up stories and give money to the poor to her heart's content.