diff --git a/.env.example b/.env.example
new file mode 100644
index 0000000..d7665eb
--- /dev/null
+++ b/.env.example
@@ -0,0 +1,3 @@
+DATABASE_URL=postgresql+psycopg2://postgres:postgres@localhost:5432/url_db
+BASE_URL=http://localhost:8000
+DEBUG=True
\ No newline at end of file
diff --git a/.gitignore b/.gitignore
index 1cd01d9..df27453 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,7 +1,44 @@
-app/__pycache__
-__pycache__
-.pytest_cache/
+# Environment variables
+.env
+.env.local
+.env.*
+
+# Keep the example file for setup instructions
+!.env.example
+
+# Virtual environments
 venv/
+.env/
+
+# Python bytecode and cache
+__pycache__/
+*.pyc
+*.pyo
+*.pyd
+.python-version
+
+# Pytest cache
+.pytest_cache/
+
+# IDE/editor files
+.vscode/
+.idea/
+*.swp
+*.swo
+
+# Docker-related files
+*.log
+docker-compose.override.yml
+
+# Coverage reports
+htmlcov/
+.coverage
+coverage.xml
+
+# Logs
+*.log
+
+# Extras
 test.txt
 diff.txt
 test.db
\ No newline at end of file
diff --git a/README.md b/README.md
index 97f609d..7409153 100644
--- a/README.md
+++ b/README.md
@@ -40,11 +40,6 @@ http://localhost:9995/docs
 Test Short URL Endpoint:<br>
 http://localhost:9995/shorten
 
-## Run Tests
-```bash
-pytest --cov=app --cov-report=term-missing
-```
-
 ## Running Alembic revision
 ```bash
 cd <your-repo-url>
@@ -55,4 +50,11 @@ alembic revision --autogenerate -m "create urls table"
 ```bash
 cd <your-repo-url>
 docker compose up --build
+```
+
+## Running tests in Docker container
+```bash
+cd <your-repo-url>
+docker compose up --build
+docker compose exec app pytest --cov=app --cov-report=term-missing
 ```
\ No newline at end of file
diff --git a/docker-compose.yml b/docker-compose.yml
index 56b48a7..1b4dcbc 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -26,6 +26,8 @@ services:
       BASE_URL: http://localhost:9995
     ports:
       - "9995:9995"
+    volumes:
+      - .:/app  # Mount current directory to /app inside container
     command: >
       sh -c "alembic upgrade head &&
              uvicorn app.main:app --host 0.0.0.0 --port 9995"
diff --git a/requirements.txt b/requirements.txt
index 36e12fa..44fedad 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -7,4 +7,5 @@ pydantic-settings==2.8.1
 
 pytest==8.3.5
 pytest-cov==5.0.0
-ruff==0.15.4
\ No newline at end of file
+ruff==0.15.4
+httpx==0.24.1
\ No newline at end of file