Decide how big you want your space. One lounge chair? A round table that seats 4? Decide where you want. Where is tge sun? Shade? Good views? More/less privacy?

The put your preferred furniture there to try it out. Define a path from the door, sod or groundcover the dirt, put pretty plants to focus on what you'll be facing.

Draw the backyard out to scale on some graph paper, You can then use that as a base map to try out whatever layout ideas you might like. Just sketch over the top of it on some tracing paper.

The space is pretty tight, so I'd try to maximize how to best use it.

If an outdoor seating/relaxing area is primary, then focus on that. It makes the most sense to me to locate any paved lounge area immediately off the current porch. And I would suggest paved....not just some lawn or groundcovers. I'd include a new set of stairs that run the full length of the porch for a better and safer transition and if you make them wide, they can also sub in for additional seating (as well as staging for a container or two). Since the area is so tiny, I'd rethink a pergola......I think it would just make the whole setting feel too enclosed. Instead, maybe opt for a moveable patio umbrella for shade and privacy.

I'd also include plans for some landscaping to make lounging outside more appealing. It's hard to see exactly how much space you have to work with so difficult to judge if inground plantings will fit easily or if you need to resort to containers.

We ned the plan for sure and I happen to love decks more than patios and IMO you have the perfect site for a nice deck right off the back door