Choose or make a track configuration
Well, assuming you have a scale picked out (let's stay away from the more-advanced narrow gauges, for now), its' time to choose the track plan, or track configuration. Many companies make published plans, such as Kalmbach and Atlas. You may copy these, adapt them or invent your own plan. Since most plywood sheets come in 4' by 8', this is a good beginning area for mounting track.
What if you decide to design your own layout? Use a compass for drawing the curves, and a ruler for drawing the straight tracks. For switches, estimate where the branch switches off. You can also use computer railroad designers, such as EditTrak, Atlas' RightTrack (version 5.0 is FREE) and XTrkCad. All offer free demos on the Internet, so download a copy today!
Make it up as you go!
No matter how exact you are in designing the layout, when the actual track components are laid there will ALWAYS be some difference in the design.
Another way to design a layout is to gather all the track that you have, and just loosely place it on the layout board. The advantage with this is that you can see the plan in full scale, and you know that everything fits before you nail it down. It's called going free-lance.
I also find it helpful to leave places for change. As you progress in railroading, I often find that it is better if you plan for a little change before you're done designing. To leave open for room could be as simple as making an open area for the yard you eventually want there. Perhaps you don't have the time or money to go all out now, but if you have a layout to be built in stages, you can surely save yourself a lot of grief.
If you're interested in sending your trains up and down hills, remember not to set the slope too steep. A useful guideline for HO scale is 4% MAXIMUM. This means that to rise up 4 inches vertically, you need 100 inches of linear run. Remember that gradual is always better, though. It's also a good idea to test your locomotives on such slopes, so that you know how many cars they can handle when going up the hills.
Yards and staging
Many modelers like to add in train yards. You'll see these in many of the pre-made track plans that you will encounter. If you intend to use Kadee or other magnetic knuckle couplers, it's handy to take a tip from prototype railroads and build a "hump" yard. That is, put the uncoupler on a gentle slope so that uncoupled cars roll gently away from the mainline.
Staging yards are hidden sections of track where modelers can send trains and then call them back later. Primarily used to simulate long distance runs in operating sessions, staging yards can also be adapted for storage. A variation is to create a "fiddle shelf" yard where removable sections of track can have trains parked on them and then be moved.
Minimum radius curves
Instead of using sectional track, many advanced modelers prefer to design with flex-track in mind. Since flex track can be ordered in bundles for less money, it's also an economical choice. If you're using flex-track, it's useful to set a minimum radius for your design. Broad is always better, so I recommend above 24" radius for HO scale. If things must get tight, remember that 4-axle diesels require 18" and 6-axles require at least 22" radius curves.
Remember to leave yourself access to all parts of your layout, even those that seem like you'll never need to reach there. On larger layouts, or layouts with broad inner sections, access hatches are often constructed. They're basically small holes in the scenery where modelers can pop up from beneath. If you decide that you need access hatches, remember to make the opening wide enough for you to move around in. Make the removable section light enough that you can handle it and not worry about dropping it. Lastly, many modelers like to hide the edges of the hole with a row of trees or other visual obstructions.