diff --git a/ecosystem.config.js b/ecosystem.config.js
index 98bd384..5d52aae 100644
--- a/ecosystem.config.js
+++ b/ecosystem.config.js
@@ -2,9 +2,8 @@ module.exports = {
   apps: [
     {
       name: 'vsphere-backup-manager',
-      // Gunicorn as the production WSGI server
-      // If using a virtualenv, replace 'gunicorn' with './venv/bin/gunicorn'
-      script: 'gunicorn',
+      // Gunicorn inside the virtualenv as the production WSGI server
+      script: './venv/bin/gunicorn',
       args: [
         '--workers', '4',
         '--bind', '127.0.0.1:5000',
diff --git a/setup.sh b/setup.sh
index 9833ac5..81d918c 100644
--- a/setup.sh
+++ b/setup.sh
@@ -18,15 +18,17 @@ echo "=========================================="
 echo ""
 
 # ── 1. Install system packages ────────────────────────────────────────────────
-echo "[1/6] Installing Nginx..."
+echo "[1/6] Installing Nginx and Python Venv..."
 sudo -E apt update
-sudo -E apt install -y nginx
+sudo -E apt install -y nginx python3-venv
 
-# ── 2. Install Python packages ────────────────────────────────────────────────
-echo "[2/6] Installing Python dependencies (including gunicorn)..."
-# If you use a virtualenv, activate it first:
-#   source ./venv/bin/activate
-pip install -r "$APP_DIR/requirements.txt"
+# ── 2. Install Python packages in virtual environment ────────────────────────
+echo "[2/6] Setting up virtual environment and installing Python dependencies..."
+if [ ! -d "$APP_DIR/venv" ]; then
+    python3 -m venv "$APP_DIR/venv"
+fi
+"$APP_DIR/venv/bin/pip" install --upgrade pip
+"$APP_DIR/venv/bin/pip" install -r "$APP_DIR/requirements.txt"
 
 # ── 3. Generate self-signed SSL certificate (10-year validity) ────────────────
 echo "[3/6] Generating self-signed TLS certificate (10 years)..."