diff --git a/.dockerignore b/.dockerignore
index c767d4ab9487a77d736cfb8ec4eb93ec792014e7..ab16628810d678575aa5a080b143577b7f5bf625 100644
--- a/.dockerignore
+++ b/.dockerignore
@@ -3,3 +3,4 @@
 __pycache__
 settings*.cfg
 client
+data
diff --git a/.env b/.env
new file mode 100644
index 0000000000000000000000000000000000000000..8aff1d7478c383e23064c6167b612857c084de20
--- /dev/null
+++ b/.env
@@ -0,0 +1,4 @@
+POSTGRES_USER=ics
+POSTGRES_PASSWORD=icspwd
+POSTGRES_DB=inventory_db
+PGDATA_VOLUME=./data/dev
diff --git a/.gitignore b/.gitignore
index 5808abb552eec2870f293882765059f8b6fe00e6..ea8b9bbd958d85ed5a4e2c2682831e6ef432e85b 100644
--- a/.gitignore
+++ b/.gitignore
@@ -3,3 +3,4 @@
 __pycache__
 *.pyc
 settings*.cfg
+/data
diff --git a/README.rst b/README.rst
index 799e2bcbda6d4c6bba4aa52fb467b1b483f2b65b..f6f4d2b97c4442a0e282f56635181153cfec8bad 100644
--- a/README.rst
+++ b/README.rst
@@ -11,10 +11,9 @@ You can use docker for development:
 
 1. Clone the repository
 
-2. Create the database::
+2. Create the database. Data will be stored under "./data" by default.
+   You can export the PGDATA_VOLUME variable to use another directory::
 
-    $ mkdir /data/pgdata
-    $ export PGDATA_VOLUME=/data/pgdata
     # Start only postgres so it has time to initialize
     $ docker-compose up -d postgres
     # Create the database
diff --git a/docker-compose.yml b/docker-compose.yml
index 871c82afa84c28bd3fcdaf25730a58f703dac361..3f2378279a2b3291efc10a5fe91b452e57cb1ebc 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -3,6 +3,7 @@ services:
   web:
     image: inventory
     container_name: inventory_web
+    build: .
     environment:
       LOCAL_SETTINGS: /app/settings.cfg
       FLASK_APP: /app/wsgi.py
@@ -22,7 +23,7 @@ services:
     volumes:
       - ${PGDATA_VOLUME}:/var/lib/postgresql/data/pgdata
     environment:
-      POSTGRES_USER: ics
-      POSTGRES_PASSWORD: icspwd
-      POSTGRES_DB: inventory_db
+      POSTGRES_USER: ${POSTGRES_USER}
+      POSTGRES_PASSWORD: ${POSTGRES_PASSWORD}
+      POSTGRES_DB: ${POSTGRES_DB}
       PGDATA: /var/lib/postgresql/data/pgdata