What are the unique features of this world/location? (Steep stairs everywhere because it's a city built into a mountainside? Days that last 126 hours and are characterized by sizzling heat and near-constant daylight? Snow six-feet-deep in the winter? The characteristic intolerance to new people or ideas that one often finds in small towns? A haunted bathroom? A nice house that—surprise!—is occupied by hundreds of grumpy feral cats? A monthly market where the organs of supernatural creatures go up for sale to collectors?) It's okay if there's more than one unique feature to your location, or if you have multiple locations, each with distinct cultures and climates and challenges for one or more of your characters.

To what kinds of people might these unique features prove challenging? (Don't be afraid to go extreme! Extreme answers might be the ones that come first, actually. Keep going, though. The complex, nuanced ones may come later. For the above example, a house filled with feral cats could be challenging for a person with an allergy, or a person with a fear of cats, or a person with a dog, or a family with young children, or.... The opportunities are endless, and they don't have to be extreme.) Your plot won't always come from the answer to the question. Maybe you just choose a relatively regular family with a kid who wants to befriend the feral cats and gets hurt by them multiple times, but that's only a thematic echo for the character's longing for connection, and the real plot is about him making his first new friend at his new school. (Whether he makes headway with a grumpy feral kitten would be entirely optional, of course.)

What are the unique characteristics, fears, desires, needs, and struggles of this character/these characters? (They could be diagnoses or past traumas, cherished dreams, disabilities, special interests, plans for the future, treasured relationships, living situations, socioeconomic statuses, weaknesses, phobias—the list goes on and on.) Then, depending on which one of those many possible examples jumps out at you, you might ask some of the questions below...

What sort of situation would make the character face these fears? (This one is pretty straightforward. If your character fears death, threaten her life. If he fears failure, maybe he's in a situation beyond his abilities. Those are the obvious and easy ones, but there are millions of different answers to any one question. The first one that comes to mind won't always be the best.)

What sort of situation would threaten the character's status quo or deny the character something he or she needs? (If the character is happy and well-adjusted and popular, is there a situation where these things could be to the character's detriment? Alternatively, is there a situation that might threaten to take away those things? They should, of course, be things the character doesn't want to lose. If a character is popular but doesn't want to be, losing the respect of her peers isn't a genuine threat.)

What situation might be uniquely challenging for a character with this particular set of struggles?

Zombie apocalypse + character with limited mobility
Animal shelter volunteer work + character who despises dogs
Alaska in summer (where the sun is up almost all day) + a vampire
Speech competition + minimally verbal autistic protagonist with something important to say
Planet with multiple moons + a werewolf (See: "In Between Moons"  I loved that concept!)
Speed-dating event + character determined to remain single
Color-coded wires on an active bomb + colorblind protagonist
Clown convention + person with coulrophobia