diff --git a/install.php b/install.php
new file mode 100644
index 0000000..0eee691
--- /dev/null
+++ b/install.php
@@ -0,0 +1,226 @@
+<?php
+session_start();
+
+$config_file = __DIR__ . '/db/config.php';
+$step = isset($_GET['step']) ? (int)$_GET['step'] : 1;
+
+// If config exists and we are at step 1, we might want to skip to step 2
+if (file_exists($config_file) && $step === 1) {
+    $step = 2;
+}
+
+$error = '';
+$success = '';
+
+if ($_SERVER['REQUEST_METHOD'] === 'POST') {
+    if ($step === 1) {
+        $host = $_POST['db_host'] ?? '';
+        $name = $_POST['db_name'] ?? '';
+        $user = $_POST['db_user'] ?? '';
+        $pass = $_POST['db_pass'] ?? '';
+
+        try {
+            $pdo = new PDO("mysql:host=$host", $user, $pass);
+            $pdo->exec("CREATE DATABASE IF NOT EXISTS `$name` CHARACTER SET utf8mb4 COLLATE utf8mb4_unicode_ci");
+            $pdo = new PDO("mysql:host=$host;dbname=$name", $user, $pass);
+            
+            $config_content = "<?php
+define('DB_HOST', '$host');
+define('DB_NAME', '$name');
+define('DB_USER', '$user');
+define('DB_PASS', '$pass');
+
+function db() {
+    static \$pdo;
+    if (!\$pdo) {
+        \$pdo = new PDO('mysql:host='.DB_HOST.';dbname='.DB_NAME.';charset=utf8mb4', DB_USER, DB_PASS, [
+            PDO::ATTR_ERRMODE => PDO::ERRMODE_EXCEPTION,
+            PDO::ATTR_DEFAULT_FETCH_MODE => PDO::FETCH_ASSOC,
+        ]);
+    }
+    return \$pdo;
+}
+
+require_once __DIR__ . '/../includes/functions.php';
+";
+            file_put_contents($config_file, $config_content);
+            header("Location: install.php?step=2");
+            exit;
+        } catch (Exception $e) {
+            $error = "Database Connection Failed: " . $e->getMessage();
+        }
+    } elseif ($step === 2) {
+        require_once $config_file;
+        try {
+            $pdo = db();
+            
+            // 1. Run Base Schema
+            $schema = file_get_contents(__DIR__ . '/db/schema.sql');
+            $pdo->exec($schema);
+            
+            // 2. Run Migrations
+            $migrations_dir = __DIR__ . '/db/migrations/';
+            $migrations = glob($migrations_dir . '*.sql');
+            sort($migrations);
+            foreach ($migrations as $migration) {
+                $sql = file_get_contents($migration);
+                if (!empty(trim($sql))) {
+                    $pdo->exec($sql);
+                }
+            }
+            
+            // 3. Seed initial data (from init.php logic)
+            $stmt = $pdo->query("SELECT COUNT(*) FROM outlets");
+            if ($stmt->fetchColumn() == 0) {
+                $pdo->exec("INSERT INTO outlets (name, address) VALUES ('Main Downtown', '123 Main St'), ('Westside Hub', '456 West Blvd')");
+                $pdo->exec("INSERT INTO categories (name, sort_order) VALUES ('Burgers', 1), ('Sides', 2), ('Drinks', 3)");
+                $pdo->exec("INSERT INTO products (category_id, name, description, price) VALUES 
+                    (1, 'Signature Burger', 'Juicy beef patty with special sauce', 12.99),
+                    (1, 'Veggie Delight', 'Plant-based patty with fresh avocado', 11.50),
+                    (2, 'Truffle Fries', 'Crispy fries with truffle oil and parmesan', 5.99),
+                    (3, 'Craft Cola', 'House-made sparkling cola', 3.50)");
+            }
+
+            header("Location: install.php?step=3");
+            exit;
+        } catch (Exception $e) {
+            $error = "Initialization Failed: " . $e->getMessage();
+        }
+    } elseif ($step === 3) {
+        require_once $config_file;
+        $username = $_POST['admin_user'] ?? '';
+        $password = $_POST['admin_pass'] ?? '';
+        $email = $_POST['admin_email'] ?? '';
+
+        if (empty($username) || empty($password)) {
+            $error = "Username and Password are required.";
+        } else {
+            try {
+                $pdo = db();
+                $hashed_pass = password_hash($password, PASSWORD_DEFAULT);
+                
+                // Ensure Admin group exists
+                $stmt = $pdo->prepare("SELECT id FROM user_groups WHERE name = 'Administrator' LIMIT 1");
+                $stmt->execute();
+                $group_id = $stmt->fetchColumn();
+
+                if (!$group_id) {
+                    $pdo->exec("INSERT INTO user_groups (name, permissions) VALUES ('Administrator', 'all')");
+                    $group_id = $pdo->lastInsertId();
+                }
+
+                $stmt = $pdo->prepare("INSERT INTO users (group_id, username, password, full_name, email, is_active) VALUES (?, ?, ?, ?, ?, 1)");
+                $stmt->execute([$group_id, $username, $hashed_pass, 'Super Admin', $email]);
+                
+                header("Location: install.php?step=4");
+                exit;
+            } catch (Exception $e) {
+                $error = "Failed to create Admin: " . $e->getMessage();
+            }
+        }
+    }
+}
+
+?>
+<!DOCTYPE html>
+<html lang="en">
+<head>
+    <meta charset="UTF-8">
+    <meta name="viewport" content="width=device-width, initial-scale=1.0">
+    <title>POS System Installation</title>
+    <link href="https://cdn.jsdelivr.net/npm/bootstrap@5.3.0/dist/css/bootstrap.min.css" rel="stylesheet">
+    <style>
+        body { background-color: #f8f9fa; }
+        .install-card { max-width: 600px; margin: 50px auto; border-radius: 15px; box-shadow: 0 10px 30px rgba(0,0,0,0.1); }
+        .step-indicator { display: flex; justify-content: space-between; margin-bottom: 30px; }
+        .step { width: 30px; height: 30px; border-radius: 50%; background: #dee2e6; display: flex; align-items: center; justify-content: center; font-weight: bold; }
+        .step.active { background: #0d6efd; color: white; }
+        .step.completed { background: #198754; color: white; }
+    </style>
+</head>
+<body>
+    <div class="container">
+        <div class="card install-card">
+            <div class="card-body p-5">
+                <h2 class="text-center mb-4">Installation</h2>
+                
+                <div class="step-indicator">
+                    <div class="step <?= $step >= 1 ? ($step > 1 ? 'completed' : 'active') : '' ?>">1</div>
+                    <div class="step <?= $step >= 2 ? ($step > 2 ? 'completed' : 'active') : '' ?>">2</div>
+                    <div class="step <?= $step >= 3 ? ($step > 3 ? 'completed' : 'active') : '' ?>">3</div>
+                    <div class="step <?= $step >= 4 ? ($step > 4 ? 'completed' : 'active') : '' ?>">4</div>
+                </div>
+
+                <?php if ($error): ?>
+                    <div class="alert alert-danger"><?= $error ?></div>
+                <?php endif; ?>
+
+                <?php if ($step === 1): ?>
+                    <h4>Step 1: Database Configuration</h4>
+                    <p class="text-muted">Enter your database connection details.</p>
+                    <form method="POST">
+                        <div class="mb-3">
+                            <label class="form-label">DB Host</label>
+                            <input type="text" name="db_host" class="form-control" value="localhost" required>
+                        </div>
+                        <div class="mb-3">
+                            <label class="form-label">DB Name</label>
+                            <input type="text" name="db_name" class="form-control" placeholder="pos_system" required>
+                        </div>
+                        <div class="mb-3">
+                            <label class="form-label">DB User</label>
+                            <input type="text" name="db_user" class="form-control" required>
+                        </div>
+                        <div class="mb-3">
+                            <label class="form-label">DB Password</label>
+                            <input type="password" name="db_pass" class="form-control">
+                        </div>
+                        <button type="submit" class="btn btn-primary w-100">Test Connection & Save</button>
+                    </form>
+
+                <?php elseif ($step === 2): ?>
+                    <h4>Step 2: Initialize Database</h4>
+                    <p>Ready to create tables and run migrations. This will set up the latest database structure.</p>
+                    <form method="POST">
+                        <button type="submit" class="btn btn-primary w-100">Run Database Setup</button>
+                    </form>
+
+                <?php elseif ($step === 3): ?>
+                    <h4>Step 3: Create Super Admin</h4>
+                    <p class="text-muted">Create your first administrator account.</p>
+                    <form method="POST">
+                        <div class="mb-3">
+                            <label class="form-label">Username</label>
+                            <input type="text" name="admin_user" class="form-control" value="admin" required>
+                        </div>
+                        <div class="mb-3">
+                            <label class="form-label">Email</label>
+                            <input type="email" name="admin_email" class="form-control" placeholder="admin@example.com" required>
+                        </div>
+                        <div class="mb-3">
+                            <label class="form-label">Password</label>
+                            <input type="password" name="admin_pass" class="form-control" required>
+                        </div>
+                        <button type="submit" class="btn btn-primary w-100">Create Admin Account</button>
+                    </form>
+
+                <?php elseif ($step === 4): ?>
+                    <div class="text-center">
+                        <div class="text-success mb-4">
+                            <svg xmlns="http://www.w3.org/2000/svg" width="64" height="64" fill="currentColor" class="bi bi-check-circle-fill" viewBox="0 0 16 16">
+                                <path d="M16 8A8 8 0 1 1 0 8a8 8 0 0 1 16 0zm-3.97-3.03a.75.75 0 0 0-1.08.022L7.477 9.417 5.384 7.323a.75.75 0 0 0-1.06 1.06L6.97 11.03a.75.75 0 0 0 1.079-.02l3.992-4.99a.75.75 0 0 0-.01-1.05z"/>
+                            </svg>
+                        </div>
+                        <h4>Installation Complete!</h4>
+                        <p>The system has been successfully installed.</p>
+                        <div class="alert alert-warning mt-3">
+                            <strong>Security Warning:</strong> Please delete the <code>install.php</code> file from your server immediately!
+                        </div>
+                        <a href="login.php" class="btn btn-primary mt-3">Go to Login</a>
+                    </div>
+                <?php endif; ?>
+            </div>
+        </div>
+    </div>
+</body>
+</html>