Remove the existing door from the door frame by unscrewing the hinges and lifting the door out of the frame.
Remove the existing door frame from the rough opening by prying the jambs out with a crowbar.
Outline the size of the new rough opening by drawing it with a pencil on the exterior siding of the shed.
Cut out the new rough opening using a circular saw. Cut the same dimensions out of the interior siding or wall covering of the shed, if it has any.
Cut out any studs that are in the way of the new opening.
Install a new header at the top of the new opening to support the shed above it. Make a header by nailing together two 2-by-8s with a length equal to the width of the opening, then install the header by situating it between the studs on either side of the opening and driving 3-inch-long screws through the studs and into the ends of the header.
Build or buy a door to fit the new opening.