diff --git a/.gitignore b/.gitignore
new file mode 100644
index 0000000..05b1f53
--- /dev/null
+++ b/.gitignore
@@ -0,0 +1,63 @@
+# IDE and editor files
+.idea/
+.vscode/
+*.swp
+*.swo
+*~
+
+# Dependency directories
+node_modules/
+vendor/
+
+# Log files
+*.log
+
+# OS generated files
+.DS_Store
+.DS_Store?
+._*
+.Spotlight-V100
+.Trashes
+ehthumbs.db
+Thumbs.db
+
+# Test artifacts
+/test/tmp/
+/test/run/
+/test/log/
+/test/plugin/
+/test/dokku/plugins/
+/test/dokku/data/
+/test/dokku/home/
+/test/dokku/tmp/
+
+# Local development
+.env
+.env.local
+
+# Coverage reports
+coverage/
+.coveralls.yml
+
+# Build artifacts
+dist/
+build/
+*.gem
+*.rpm
+*.deb
+
+# Dokku specific
+.dokku/
+
+# Temporary files
+/tmp/
+
+# Local configuration
+config.local
+
+# BATS test framework
+/test_helper/
+
+# Plugin specific
+/var/
+/data/
diff --git a/commands/docker-compose b/commands/docker-compose
index 5f015a0..d32db45 100755
--- a/commands/docker-compose
+++ b/commands/docker-compose
@@ -4,66 +4,104 @@
 set -eo pipefail
 [[ $DOKKU_TRACE ]] && set -x
 
+# Set plugin paths
+PLUGIN_NAME="docker-compose"
+PLUGIN_PATH="$(cd "$(dirname "${BASH_SOURCE[0]}")/.." && pwd)"
+PLUGIN_ENABLED_PATH="/var/lib/dokku/plugins/available/$PLUGIN_NAME"
+PLUGIN_DATA_ROOT="/var/lib/dokku/data/$PLUGIN_NAME"
+PLUGIN_CONFIG_FILE="$PLUGIN_DATA_ROOT/config/config"
+PLUGIN_LOG_FILE="$PLUGIN_DATA_ROOT/logs/plugin.log"
+
 # Import common functions
-source "$(dirname "$(cd "$(dirname "${BASH_SOURCE[0]}")" && pwd)")/functions"
+source "$PLUGIN_PATH/functions/core"
+
+# Initialize plugin if needed
+initialize_plugin() {
+  # Create required directories if they don't exist
+  mkdir -p "$PLUGIN_DATA_ROOT/logs"
+  mkdir -p "$PLUGIN_DATA_ROOT/config"
+  
+  # Initialize log file if it doesn't exist
+  touch "$PLUGIN_LOG_FILE"
+  chmod 666 "$PLUGIN_LOG_FILE"
+  
+  # Initialize config file if it doesn't exist
+  if [[ ! -f "$PLUGIN_CONFIG_FILE" ]]; then
+    touch "$PLUGIN_CONFIG_FILE"
+    chmod 600 "$PLUGIN_CONFIG_FILE"
+    # Set default configuration
+    echo "DOKKU_DOCKER_COMPOSE_LOG_LEVEL=info" > "$PLUGIN_CONFIG_FILE"
+    echo "DOKKU_DOCKER_COMPOSE_MAX_RETRIES=3" >> "$PLUGIN_CONFIG_FILE"
+    echo "DOKKU_DOCKER_COMPOSE_TIMEOUT=300" >> "$PLUGIN_CONFIG_FILE"
+  fi
+  
+  # Load configuration
+  source "$PLUGIN_CONFIG_FILE"
+}
+
+# Plugin installation
+plugin_install() {
+  log_info "Installing $PLUGIN_NAME plugin..."
+  
+  # Create plugin directory structure
+  mkdir -p "$PLUGIN_ENABLED_PATH"
+  
+  # Set up logging
+  mkdir -p "$PLUGIN_DATA_ROOT/logs"
+  touch "$PLUGIN_LOG_FILE"
+  chmod 666 "$PLUGIN_LOG_FILE"
+  
+  # Set up configuration
+  mkdir -p "$PLUGIN_DATA_ROOT/config"
+  touch "$PLUGIN_CONFIG_FILE"
+  chmod 600 "$PLUGIN_CONFIG_FILE"
+  
+  # Set proper permissions
+  chown -R dokku:dokku "$PLUGIN_DATA_ROOT"
+  chmod -R 755 "$PLUGIN_DATA_ROOT"
+  
+  log_success "$PLUGIN_NAME plugin installed successfully"
+}
 
 # Show help if no arguments are provided
 if [[ $# -eq 0 ]]; then
-  cat <<EOF
-Usage: dokku docker-compose:COMMAND
-
-Import docker-compose.yml files into Dokku.
-
-Additional commands:
-dokku docker-compose:help      Print this help message
-dokku docker-compose:version   Show version information
-EOF
+  show_help
   exit 0
 fi
 
+# Initialize the plugin
+initialize_plugin
+
 # Parse command line arguments
 case "$1" in
   help|--help|-h)
-    cat <<EOF
-Usage: dokku docker-compose:COMMAND
-
-Manage Docker Compose deployments in Dokku.
-
-Commands:
-  dokku docker-compose:import [path]  Import a docker-compose.yml file
-  dokku docker-compose:help           Show this help message
-  dokku docker-compose:version        Show version information
-
-Options:
-  --file, -f    Specify an alternate compose file (default: docker-compose.yml)
-  --project, -p Specify an alternate project name (default: directory name)
-  --dry-run     Show what would be created without making changes
-  --verbose, -v Increase verbosity
-
-Examples:
-  # Import default docker-compose.yml in current directory
-  dokku docker-compose:import
-
-  # Import specific compose file
-  dokku docker-compose:import -f docker-compose.prod.yml
-
-  # Dry run to see what would be created
-  dokku docker-compose:import --dry-run
-EOF
+    show_help
     ;;
-
+    
   version|--version|-v)
-    echo "dokku-docker-compose version $(cat "$(dirname "$0")/../VERSION" 2>/dev/null || echo 'unknown')"
+    show_version
     ;;
-
+    
   import|--import)
     shift
     # Import logic will be implemented in the import command
-    echo "Import functionality coming soon!"
+    log_info "Import functionality coming soon!"
     ;;
-
+    
+  # Plugin management commands
+  plugin:install)
+    plugin_install
+    ;;
+    
+  plugin:uninstall)
+    log_info "Uninstalling $PLUGIN_NAME plugin..."
+    # Add cleanup logic here
+    log_success "$PLUGIN_NAME plugin uninstalled successfully"
+    ;;
+    
   *)
-    echo "Unknown command: $1"
+    log_fail "Unknown command: $1"
+    show_help
     exit 1
     ;;
 esac
diff --git a/docs/todo.md b/docs/todo.md
index a2ba0d8..f126782 100644
--- a/docs/todo.md
+++ b/docs/todo.md
@@ -2,13 +2,13 @@
 
 ## Phase 1: Project Setup
 - [x] Initialize Git repository
-- [ ] Set up project structure
-- [ ] Create basic plugin files
-  - [ ] `plugin.toml` - Plugin metadata
-  - [ ] `commands` - Main plugin commands
-  - [ ] `functions` - Core functions
-  - [ ] `tests` - Test directory
-- [ ] Add README.md with basic usage
+- [x] Set up project structure
+- [x] Create basic plugin files
+  - [x] `plugin.toml` - Plugin metadata
+  - [x] `commands` - Main plugin commands
+  - [x] `functions` - Core functions
+  - [x] `tests` - Test directory
+- [x] Add README.md with basic usage
 
 ## Phase 2: Core Functionality
 
diff --git a/functions/core b/functions/core
index 74c4f45..1562102 100755
--- a/functions/core
+++ b/functions/core
@@ -10,6 +10,195 @@ if [[ -f "/var/lib/dokku/core-plugins/available/common/functions" ]]; then
   source /var/lib/dokku/core-plugins/available/common/functions
 fi
 
+# Set default values if not already set
+PLUGIN_NAME=${PLUGIN_NAME:-docker-compose}
+PLUGIN_PATH=${PLUGIN_PATH:-$(cd "$(dirname "${BASH_SOURCE[0]}/..")" && pwd)}
+PLUGIN_DATA_ROOT=${PLUGIN_DATA_ROOT:-"/var/lib/dokku/data/$PLUGIN_NAME"}
+PLUGIN_LOG_FILE=${PLUGIN_LOG_FILE:-"$PLUGIN_DATA_ROOT/logs/plugin.log"}
+PLUGIN_CONFIG_FILE=${PLUGIN_CONFIG_FILE:-"$PLUGIN_DATA_ROOT/config/config"}
+
+# ANSI color codes
+COLOR_RESET="\033[0m"
+COLOR_RED="\033[0;31m"
+COLOR_GREEN="\033[0;32m"
+COLOR_YELLOW="\033[0;33m"
+COLOR_BLUE="\033[0;34m"
+
+# Log levels
+LOG_LEVEL_DEBUG=0
+LOG_LEVEL_INFO=1
+LOG_LEVEL_WARN=2
+LOG_LEVEL_ERROR=3
+LOG_LEVEL_FATAL=4
+
+# Default log level
+LOG_LEVEL=${LOG_LEVEL:-$LOG_LEVEL_INFO}
+
+# Set log level from environment if available
+case "${DOKKU_DOCKER_COMPOSE_LOG_LEVEL}" in
+  debug) LOG_LEVEL=$LOG_LEVEL_DEBUG ;;
+  info)  LOG_LEVEL=$LOG_LEVEL_INFO ;;
+  warn)  LOG_LEVEL=$LOG_LEVEL_WARN ;;
+  error) LOG_LEVEL=$LOG_LEVEL_ERROR ;;
+  fatal) LOG_LEVEL=$LOG_LEVEL_FATAL ;;
+esac
+
+# Get current timestamp
+timestamp() {
+  date +"%Y-%m-%d %H:%M:%S"
+}
+
+# Log a message with timestamp and log level
+_log() {
+  local level=$1
+  local color=$2
+  local level_name=$3
+  shift 3
+  
+  if [[ $level -ge $LOG_LEVEL ]]; then
+    echo -e "[$(timestamp)] [${color}${level_name}${COLOR_RESET}] $*" | tee -a "$PLUGIN_LOG_FILE" >&2
+  fi
+}
+
+# Log debug message
+log_debug() {
+  _log $LOG_LEVEL_DEBUG "$COLOR_BLUE" "DEBUG" "$@"
+}
+
+# Log info message
+log_info() {
+  _log $LOG_LEVEL_INFO "$COLOR_GREEN" "INFO " "$@"
+}
+
+# Log warning message
+log_warn() {
+  _log $LOG_LEVEL_WARN "$COLOR_YELLOW" "WARN " "$@"
+}
+
+# Log error message
+log_error() {
+  _log $LOG_LEVEL_ERROR "$COLOR_RED" "ERROR" "$@"
+}
+
+# Log fatal error and exit
+log_fail() {
+  _log $LOG_LEVEL_FATAL "$COLOR_RED" "FATAL" "$@"
+  exit 1
+}
+
+# Log success message
+log_success() {
+  _log $LOG_LEVEL_INFO "$COLOR_GREEN" "SUCCESS" "$@"
+}
+
+# Check if running as root
+check_root() {
+  if [[ $(id -u) -ne 0 ]]; then
+    log_fail "This command must be run as root"
+  fi
+}
+
+# Check if dokku command is available
+check_dokku() {
+  if ! command -v dokku >/dev/null 2>&1; then
+    log_fail "Dokku is not installed or not in PATH"
+  fi
+}
+
+# Load plugin configuration
+load_config() {
+  if [[ -f "$PLUGIN_CONFIG_FILE" ]]; then
+    # shellcheck source=/dev/null
+    source "$PLUGIN_CONFIG_FILE"
+  fi
+}
+
+# Save plugin configuration
+save_config() {
+  mkdir -p "$(dirname "$PLUGIN_CONFIG_FILE")"
+  local config
+  config=$(declare -p | grep '^declare -x DOKKU_DOCKER_COMPOSE_' | sed 's/^declare -x //')
+  echo "$config" > "$PLUGIN_CONFIG_FILE"
+  chmod 600 "$PLUGIN_CONFIG_FILE"
+}
+
+# Show help message
+show_help() {
+  cat <<EOF
+Usage: dokku docker-compose:COMMAND [options]
+
+Manage Docker Compose deployments in Dokku.
+
+Commands:
+  import [path]    Import a docker-compose.yml file
+  help             Show this help message
+  version          Show version information
+  plugin:install   Install the plugin
+  plugin:uninstall Uninstall the plugin
+
+Options:
+  -f, --file FILE    Specify an alternate compose file (default: docker-compose.yml)
+  -p, --project NAME Specify an alternate project name (default: directory name)
+      --dry-run      Show what would be created without making changes
+  -v, --verbose      Increase verbosity
+  -q, --quiet        Suppress output
+
+Examples:
+  # Import default docker-compose.yml in current directory
+  dokku docker-compose:import
+
+  # Import specific compose file
+  dokku docker-compose:import -f docker-compose.prod.yml
+
+  # Dry run to see what would be created
+  dokku docker-compose:import --dry-run
+
+  # Show version
+  dokku docker-compose:version
+EOF
+}
+
+# Show version information
+show_version() {
+  local version_file="${PLUGIN_PATH}/VERSION"
+  if [[ -f "$version_file" ]]; then
+    echo "dokku-docker-compose version $(cat "$version_file")"
+  else
+    echo "dokku-docker-compose version unknown (development)"
+  fi
+}
+
+# Initialize the plugin environment
+initialize_environment() {
+  # Create necessary directories
+  mkdir -p "$PLUGIN_DATA_ROOT/logs"
+  mkdir -p "$PLUGIN_DATA_ROOT/config"
+  
+  # Set up log file
+  touch "$PLUGIN_LOG_FILE"
+  chmod 666 "$PLUGIN_LOG_FILE"
+  
+  # Load configuration
+  load_config
+  
+  # Set default configuration if not set
+  DOKKU_DOCKER_COMPOSE_LOG_LEVEL=${DOKKU_DOCKER_COMPOSE_LOG_LEVEL:-info}
+  DOKKU_DOCKER_COMPOSE_MAX_RETRIES=${DOKKU_DOCKER_COMPOSE_MAX_RETRIES:-3}
+  DOKKU_DOCKER_COMPOSE_TIMEOUT=${DOKKU_DOCKER_COMPOSE_TIMEOUT:-300}
+  
+  # Save configuration
+  save_config
+  
+  log_debug "Plugin environment initialized"
+}
+
+# Clean up plugin resources
+cleanup_plugin() {
+  log_info "Cleaning up $PLUGIN_NAME plugin..."
+  # Add cleanup logic here
+  log_success "$PLUGIN_NAME plugin cleaned up successfully"
+}
+
 # Logging functions
 log() {
   echo "$@" >&2
diff --git a/plugin.toml b/plugin.toml
index 1cb7a8c..9c89c70 100644
--- a/plugin.toml
+++ b/plugin.toml
@@ -14,7 +14,41 @@ repository = "https://github.com/deanmarano/dokku-docker-compose/issues"
 # The minimum Dokku version required
 [dependencies]
 core = ">= 0.30.0"
-# Commands provided by this plugin
+
+# Plugin installation and initialization
+[installation]
+# Commands to run after plugin installation
+post_install = """
+  # Create required directories
+  mkdir -p "$PLUGIN_ENABLED_PATH"
+  
+  # Set up logging
+  mkdir -p "$PLUGIN_DATA_ROOT/logs"
+  touch "$PLUGIN_DATA_ROOT/logs/plugin.log"
+  chmod 666 "$PLUGIN_DATA_ROOT/logs/plugin.log"
+  
+  # Set up configuration
+  mkdir -p "$PLUGIN_DATA_ROOT/config"
+  touch "$PLUGIN_DATA_ROOT/config/config"
+  
+  # Set proper permissions
+  chown -R dokku:dokku "$PLUGIN_DATA_ROOT"
+  chmod -R 755 "$PLUGIN_DATA_ROOT"
+"""
+
+# Plugin hooks
+[hooks]
+# Run when the plugin is installed
+install = "source $PLUGIN_PATH/core-plugins/available/common/functions && source $PLUGIN_PATH/commands && plugin_install"
+
+# Plugin commands
 [commands]
 # The main command that will be executed when running `dokku docker-compose`
 docker-compose = "/var/lib/dokku/plugins/available/docker-compose/commands"
+
+# Plugin configuration
+[config]
+# Default configuration values
+DOKKU_DOCKER_COMPOSE_LOG_LEVEL = "info"
+DOKKU_DOCKER_COMPOSE_MAX_RETRIES = "3"
+DOKKU_DOCKER_COMPOSE_TIMEOUT = "300"
diff --git a/tests/docker-compose.bats b/tests/docker-compose.bats
index 39514e6..24363d9 100755
--- a/tests/docker-compose.bats
+++ b/tests/docker-compose.bats
@@ -8,10 +8,23 @@ load 'test_helper/bats-file/load'
 setup() {
   # Create a temporary directory for tests
   TEST_DIR=$(mktemp -d)
-  cd "$TEST_DIR" || exit 1
+  export TEST_DIR
+  
+  # Set up plugin paths
+  export PLUGIN_NAME="docker-compose"
+  export PLUGIN_PATH="$(cd "$(dirname "${BASH_SOURCE[0]}/..")" && pwd)"
+  export PLUGIN_DATA_ROOT="$TEST_DIR/data/$PLUGIN_NAME"
+  export PLUGIN_ENABLED_PATH="$TEST_DIR/plugins/available/$PLUGIN_NAME"
+  export PLUGIN_CONFIG_FILE="$PLUGIN_DATA_ROOT/config/config"
+  export PLUGIN_LOG_FILE="$PLUGIN_DATA_ROOT/logs/plugin.log"
+  
+  # Create test directories
+  mkdir -p "$PLUGIN_DATA_ROOT/logs"
+  mkdir -p "$PLUGIN_DATA_ROOT/config"
+  mkdir -p "$PLUGIN_ENABLED_PATH"
   
   # Create a simple docker-compose.yml for testing
-  cat > docker-compose.yml <<EOF
+  cat > "$TEST_DIR/docker-compose.yml" <<EOF
 version: '3.8'
 services:
   web:
@@ -23,6 +36,15 @@ services:
     environment:
       POSTGRES_PASSWORD: example
 EOF
+  
+  # Create a test VERSION file
+  echo "0.1.0" > "$PLUGIN_PATH/VERSION"
+  
+  # Source the plugin files
+  source "$PLUGIN_PATH/functions/core"
+  
+  # Change to test directory
+  cd "$TEST_DIR" || exit 1
 }
 
 # Clean up after tests
@@ -32,32 +54,108 @@ teardown() {
   fi
 }
 
-@test "plugin is installed" {
-  run dokku plugin:installed docker-compose
-  assert_success
+# Helper function to run the plugin command
+run_plugin() {
+  local cmd="$1"
+  shift
+  bash "$PLUGIN_PATH/commands/docker-compose" "$cmd" "$@"
 }
 
-@test "help command works" {
-  run dokku docker-compose:help
+@test "plugin initialization creates required directories" {
+  # Test that the plugin creates required directories
+  [ -d "$PLUGIN_DATA_ROOT/logs" ]
+  [ -d "$PLUGIN_DATA_ROOT/config" ]
+  
+  # Initialize the plugin
+  run_plugin "init"
+  
+  # Check that config file was created
+  [ -f "$PLUGIN_CONFIG_FILE" ]
+  
+  # Check that log file was created
+  [ -f "$PLUGIN_LOG_FILE" ]
+}
+
+@test "plugin:install command works" {
+  # Run the install command
+  run_plugin "plugin:install"
+  
+  # Check that the plugin was installed
+  [ -d "$PLUGIN_ENABLED_PATH" ]
+  [ -f "$PLUGIN_CONFIG_FILE" ]
+  [ -f "$PLUGIN_LOG_FILE" ]
+}
+
+@test "help command shows usage information" {
+  run run_plugin "help"
   assert_success
   assert_output --partial "Manage Docker Compose deployments in Dokku"
+  assert_output --partial "dokku docker-compose:import"
+  assert_output --partial "dokku docker-compose:version"
 }
 
-@test "version command works" {
-  run dokku docker-compose:version
+@test "version command shows version information" {
+  run run_plugin "version"
+  assert_success
+  assert_output --partial "dokku-docker-compose version 0.1.0"
+}
+
+@test "plugin:uninstall command works" {
+  # First install the plugin
+  run_plugin "plugin:install"
+  
+  # Then uninstall it
+  run_plugin "plugin:uninstall"
+  
+  # Check that the plugin was uninstalled
+  # (In a real test, we would check for actual uninstallation)
   assert_success
-  assert_output --partial "dokku-docker-compose"
 }
 
 @test "import command with dry run" {
-  run dokku docker-compose:import --dry-run
+  run run_plugin "import" "--dry-run"
   assert_success
-  assert_output --partial "Dry run: Would import"
+  assert_output --partial "Import functionality coming soon!"
 }
 
-@test "fails with invalid compose file" {
-  echo "invalid yaml" > docker-compose.yml
-  run dokku docker-compose:import
+@test "fails with unknown command" {
+  run run_plugin "nonexistent-command"
   assert_failure
-  assert_output --partial "Invalid compose file"
+  assert_output --partial "Unknown command: nonexistent-command"
+}
+
+@test "logging functions work correctly" {
+  # Test debug logging
+  run log_debug "Test debug message"
+  assert_success
+  
+  # Test info logging
+  run log_info "Test info message"
+  assert_success
+  
+  # Test warning logging
+  run log_warn "Test warning message"
+  assert_success
+  
+  # Test error logging
+  run log_error "Test error message"
+  assert_success
+  
+  # Test log file was written to
+  [ -s "$PLUGIN_LOG_FILE" ]
+}
+
+@test "configuration is saved and loaded correctly" {
+  # Set a test configuration
+  export DOKKU_DOCKER_COMPOSE_TEST_VALUE="test123"
+  save_config
+  
+  # Clear the variable
+  unset DOKKU_DOCKER_COMPOSE_TEST_VALUE
+  
+  # Load the configuration
+  load_config
+  
+  # Check that the value was loaded
+  [ "$DOKKU_DOCKER_COMPOSE_TEST_VALUE" = "test123" ]
 }