Putting a wooden shed in a sloped garden

[Welfarite]

A friend of mine is contemplating purchasing a wooden shed for his small garden. The garden is sloped and he is thinking of preparing the level site for the shed by digging into the slope. I think that may cause problems with heavy rainfall; the water will run into the back of the shed unless he has a good drainage system bewteen it and the cut-in slope. Also, the soil could collapse?
What is best thing to do to avoid problems down the road?

 

[mathepac]

Unless a proper retaining wall is designed and built, soil collapse could be a problem, even without rain, but it depends on the depth of the excavation and the nature of the soil.

Another alternative might be to install pilings / stilts and raise the shed clear of the slope, avoiding (some) digging.