Put on your safety gear.
Stake the foundation with a 2-foot perimeter. Remove the grass within the staked area. A shovel, sod cutter or rototiller will work for this step. Check the levelness of the pad in several locations including the perimeter and diagonals. Use a piece of 2x lumber that is straight with a 4-foot level sitting on the narrow side. Remove any high spots with a shovel. Tack down a sheet of thick black plastic.
Spread about 4 inches of gravel over the plastic. Square the four corners of the shed within the perimeter and mark corners with stakes and string.
For a concrete foundation, pour a 4-inch slab within the marked corners.
For a wood foundation, take your shed's dimensions to your lumber supplier, who can determine the span and order the appropriate 2x lumber for the foundation. Dig four holes at the corners of the foundation to a minimum of 24 inches. Install 4-by-4 pressure-treated posts in concrete. Plumb and level the posts, making sure they are squared to the perimeter. Wait for the concrete to set. Mark the post height so that there will be a 2-inch gap between the gravel and the bottom of your foundation's 2x lumber.
Cut off the post at the marked dimension, make sure that they are level with each other. A circular saw works well for cutting the post. Build the wood foundation per the lumber supplier's specifications.
Assemble the shed on your new foundation per the directions provided with the shed package.