Advice on transforming 12x8 storage shed to fun kid space?

I live in Texas where it gets very hot! The shed is built from HardyBoard (hope I spelled that correctly) & currently has plywood for flooring. It is not on a concrete foundation but is raised off of the ground. It also has shingles on the roof. I have no idea how to start. My vision is to have a comfy little space for my kids to hang out with friends. I'd like to put a tv, a couple of shelves & some furniture (possibly a bed....possibly a couch). I'm not looking to have water/plumbing out there. (The shed has electricity.) Any step 1 advice is welcomed! Hope I've given enough info.