The shed door is good way to learn how to hang a door, as there is a litlle more leeway allowed here than in hanging a door inside a residential house. For this project you will need a trustworthy assistant and a little patience, but it will be a nice sense of accomplishment to see the door all fitted and hanging , when the job is done.
The first thing to do before you install a shed door is to make sure there is trim around the outside of the opening and a doorjamb on the inside. Even though it is only a shed these items are necessary to prevent water damage to the frame of the shed.
Now go to the hardware store and purchase a pair hinges, a barrel bolt and a gate handle (sometimes called a pull). If you want you can use a gate latch mechanism, but the latch is not necessary. As far as hinges go, a large pair of T-shaped hinges is what you want. Six-inch galvanized T-hinges should be fine, or you can go for a black metal, ornamental style hinge. If the door is very large or heavy you might need eight-inch hinges or you can add a third six-inch hinge in-between. Chances are you will have to buy some extra long galvanized screws to attach the butt part of the hinge to the frame. These should be at least two inches long.
Once all the hardware is assembled, it is time to set the hinges. Lay the door out on a set of sawhorses and attach the long pointed part of the hinge to the face of the door. Make sure that you attach the hinge so that the screws penetrate the face of the door as well as the horizontal brace that is on the backside of the door. The hinge pin separates the square part of the hinge from the pointed end. Once attached this pin should line up in the small gap that there will be between the door and doorframe.
When attaching the hinge to the door, it is a good idea to pre-drill all your holes. Also, it is best to do one screw at a time, so that the hinge is installed in a straight line that is perpendicular to doorframe.
Go ahead and also attach the gate handle and the long shaft portion of the barrel bolt on the outside edge of the door.
Next you will have to nail three short pieces of furring strips to the inside of the doorjamb. These will act as a temporary doorstop. To do this you need to measure the width of the face of the door, then make marks that are the exact same distance back from outside edge of the door trim. Make sure you nail one piece each to the top and each side of doorjamb. This will make the task of installation much easier.
Now take two pairs of wooden shims (cedar shingles work just fine) and place them at the bottom of the door entrance, right underneath where the door will go. The shims should face each other and the combined thickness should be about ¼". A piece of plywood of the same thickness will also work. At this point, unless you are an experienced contortionist, an extra pair of hands will come in handy, for it is time to set the door in place and attach the hinges to the doorframe.
The moment of truth has now arrived, for it is time to see if the door fits. Do this and hopefully all you have left to do is to screw the square side of the hinge to the frame. Do this one screw at a time and alternate between hinges. First pre-drill and sink the screw for the top hole in the upper hinge. Then do the same for the other hinge. Now pre-drill and sink the screw for the bottom hole of the top hinge. At this point you can swing the door for a test run, but go gently and only pull the door about a foot away from the building. The door should open and shut without any problem. If that is the case, then you can go ahead and put in the rest of the screws in the same manner. Completely open and close the door a few times and you are nearly finished.
All you have left now is to attach the catch of the barrel bolt to the trim and nail the furring strips completely around three sides of the doorjamb to create your doorstop. First finish the barrel bolt and then go inside the shed with your furring strips, while your buddy bolts down the barrel latch.
Now simply nail the furring strips against the doorjamb. At the same time make sure the strips of wood butt up against the closed door. It should be a simple fit, but not too tight. Now hopefully your buddy will unlatch the barrel bolt and you can exit the shed and admire your handiwork.