To keep children occupied while the cake is being lit, give them each a piece of large white, glossy paper. Have on hand felt tip markers, crayons, stickers, etc. While they are waiting for the cake they can make their own placemats.
Surprise:
If serving cupcakes, place a raisin in one of them while baking. Whoever discovers the raisin in their cupcake will win a special prize.
Fun Idea:
Have your child set up a snack stand using a large cardboard box for a table and put shelves behind to display goods. Provide each child with play money to purchase goodies. Make your own play money out of paper if none is available. Your child will have fun being the storekeeper. Also, interacting with his or her friends at this time would be a good time to take a picture.