diff --git a/README.md b/README.md
index eceed50..d51d265 100644
--- a/README.md
+++ b/README.md
@@ -58,7 +58,14 @@ Create environment files for both the backend and the frontend before running th
 
 ### Backend (`apps/api/.env`)
 
-Create a file at `apps/api/.env` with:
+Copy the example environment file and update it with your values:
+
+```bash
+cd apps/api
+cp .env.example .env
+```
+
+Then edit `apps/api/.env` and fill in the required values:
 
 ```bash
 # Required
@@ -190,7 +197,7 @@ Alternatively, you can run the API server using Docker. A `Dockerfile` is provid
 
 ### Building and Running
 
-1. Make sure you have your `.env` file set up in `apps/api/.env` (see [Backend environment variables](#backend-appsapienv) section above)
+1. Make sure you have your `.env` file set up in `apps/api/.env`. You can copy from `.env.example` (see [Backend environment variables](#backend-appsapienv) section above)
 
 2. From the root directory, build the Docker image:
 
diff --git a/apps/api/.env.example b/apps/api/.env.example
new file mode 100644
index 0000000..12e24a4
--- /dev/null
+++ b/apps/api/.env.example
@@ -0,0 +1,32 @@
+# Note: pls don't use values as strings for the below variables, if you wanna run using docker becuase in this case, docker build fails.
+# simply use a format like this: name-of-the-variable=variable-value
+# for example: PORT=8080
+
+# Required
+CORS_ORIGINS=http://localhost:3000
+NODE_ENV=development
+PORT=8080
+
+DATABASE_URL=postgresql://USER:PASSWORD@localhost:5432/your_database_name?schema=public
+JWT_SECRET=replace-with-a-strong-random-secret
+
+# compulsory for the project search tool
+# Get a PAT from here https://github.com/settings/developers
+GITHUB_PERSONAL_ACCESS_TOKEN=token-from-your-github-account
+
+# for payments
+RAZORPAY_KEY_ID=razorpay-key-id
+RAZORPAY_KEY_SECRET=razorpay-key-secret
+RAZORPAY_WEBHOOK_SECRET=razorpay-webhook-secret
+
+# to send slack invite.
+# it'll be similar to : https://join.slack.com/t/name-of-ur-org/shared_invite/invite-id
+SLACK_INVITE_URL=slack-invite-url
+
+# to send the email (transactional)
+# get one from here: https://www.zoho.com/zeptomail/pricing.html?src=pd-menu
+ZEPTOMAIL_TOKEN=zeptomail-token
+
+# key for the encryption
+# can be created by running this: echo "$(openssl rand -hex 32)opensox$(openssl rand -hex 16)"
+ENCRYPTION_KEY=encryption-key