Clean It Out - With any organization project, you'll want to remove everything to start fresh. This goes for your shed as well. Toss any old items or trash to declutter your space. If there anything you haven't used or your family has outgrown, now might be the time to donate or sell that item. Though removing everything from your shed might seem counterproductive, it's better to see what you have to store before you create new systems for it.
If you want to go a step further and separate your tools, you'll need to get a bit more creative. One way is to utilize PVC pipe to make containers for your tools by attaching to two pieces of wood and hanging that from the wall. Another solution is to utilize a pegboard for your larger items as well, as they can hang from hooks similarly to smaller items.