This exercise involves a basic knowledge of grammar. If your children have enough grammar knowledge to identify a noun, verb, and prepositional phrase then they are ready for this.
I would suggest doing this exercise with something your children have already written: a book report, a story, or a summary of a history lesson. (Or you could start out with the example below…) Explain to your child that varying how a sentence begins will add interest to their writing. When we first learn to write we generally are taught to think in terms of a subject followed by a verb that might have a direct object. The boy kicked the ball. There is nothing wrong with this, but as you can see in the following example when all of your sentences follow a similar pattern it can sound too simple.
Matt kicked the ball. The ball hit the window before Jacob could catch it. Matt and Jacob tried to hide under the porch steps. Mother found them and sent them to their room.
If you underline the first word of each of these sentences you will see that they all begin with a noun. Ask your child to choose one of the sentences to rewrite only this time they must start the sentence with a prepositional phrase or a verb. They may have to add more details to make the sentence a complete thought.
Before Jacob could catch it, the ball hit the window. or Hiding under the porch steps Matt and Jacob waited to see if they were going to get caught.
By changing how a sentence begins we are forced to rework it and improve it. As children learn to mix up how they begin a sentence they will naturally move into more complex sentence structures which will add interest to their writing.
I would suggest that as your children write you occasionally ask them to underline the first word of each sentence and check to see how they are doing. If they have begun nearly every sentence with the subject ask them to rewrite 2 or 3 of the sentences.
If you have done Exercise No. 1 with your children this would also be a good time to have them revisit that exercise by replacing three common words (man, said, house) with more specific, descriptive words (knight, whispered, hut).