Discover how to efficiently set up a virtual private server (VPS) using Hetzner Cloud and deploy N8N using Coolify, an intuitive GUI Docker manager. This guide provides step-by-step instructions to streamline your setup process.

Step 1: Order a VPS from Hetzner Cloud

• Begin by ordering a VPS, specifically the CAX11 model, from Hetzner Cloud. Utilize this referral link to enjoy a 5-month free VPS offer. The average monthly cost post-offer is approximately $3.6.

Step 2: Select Your Server OS

• Choose Docker CE as your server operating system, which can be found in the APPS section.

Step 3: Install Coolify

• Once your server is ready, access the console and execute the following command:

  curl -fsSL https://cdn.coollabs.io/coolify/install.sh | bash 

After the installation, a dashboard URL like http://xx.xx.xx.xx:8000 will be displayed. Access this URL to set up your Coolify account.

Step 4: Create Database Containers

• Effortlessly create Postgres & Redis Containers. Coolify manages the entire setup, so no additional configuration is necessary.Note: Ensure your databases remain private and internal. Do not make them public.

Step 5: Configure N8N Application

• Add a new resource and select an application based on Docker Compose.

• Insert the following Docker Compose configuration.

services:
  n8n:
    image: 'docker.n8n.io/n8nio/n8n:ai-beta'
    environment:
      # Fully Qualified Domain Name for N8N
      - SERVICE_FQDN_N8N
      # Base URL for the n8n editor UI
      - 'N8N_EDITOR_BASE_URL=${SERVICE_FQDN_N8N}'
      # Webhook URL for n8n to receive data
      - 'WEBHOOK_URL=${SERVICE_FQDN_N8N}'
      # The host name for n8n instance
      - 'N8N_HOST=${SERVICE_DOMAIN_N8N}'
      # The timezone setting for n8n and Docker container
      - 'GENERIC_TIMEZONE="Europe/Berlin"'
      - 'TZ="Europe/Berlin"'
      # Postgres database connection details
      - 'DB_POSTGRESDB_DATABASE=${DB_POSTGRESDB_DATABASE}' # Database name for Postgres
      - 'DB_POSTGRESDB_HOST=${DB_POSTGRESDB_HOST}' # Postgres host
      - 'DB_POSTGRESDB_PASSWORD=${DB_POSTGRESDB_PASSWORD}' # Postgres password
      - 'DB_POSTGRESDB_PORT=${DB_POSTGRESDB_PORT}' # Postgres port
      - 'DB_POSTGRESDB_SCHEMA=${DB_POSTGRESDB_SCHEMA}' # Postgres database schema
      - 'DB_POSTGRESDB_USER=${DB_POSTGRESDB_USER}' # Postgres user
      # Database type, e.g., "postgresdb"
      - 'DB_TYPE=${DB_TYPE}'
      # Mode of execution, e.g., "regular" or "queue"
      - 'EXECUTIONS_MODE=${EXECUTIONS_MODE}'
      # Log level for n8n, e.g., "error", "warn", "info"
      - 'N8N_LOG_LEVEL=${N8N_LOG_LEVEL}'
      # Enable metrics for monitoring n8n performance
      - 'N8N_METRICS=${N8N_METRICS}'
      # Bull queue configuration for Redis
      - 'QUEUE_BULL_PREFIX=${QUEUE_BULL_PREFIX}' # Prefix for Bull queue names
      - 'QUEUE_BULL_REDIS_DB=${QUEUE_BULL_REDIS_DB}' # Redis database index for Bull queue
      - 'QUEUE_BULL_REDIS_HOST=${QUEUE_BULL_REDIS_HOST}' # Redis host for Bull queue
      - 'QUEUE_BULL_REDIS_PASSWORD=${QUEUE_BULL_REDIS_PASSWORD}' # Redis password for Bull queue
      - 'QUEUE_BULL_REDIS_PORT=${QUEUE_BULL_REDIS_PORT}' # Redis port for Bull queue
      # Enable diagnostics reporting and version update notifications
      - 'N8N_DIAGNOSTICS_ENABLED=${N8N_DIAGNOSTICS_ENABLED}'
      - 'N8N_VERSION_NOTIFICATIONS_ENABLED=${N8N_VERSION_NOTIFICATIONS_ENABLED}'
      # Enable workflow templates and configure external frontend hooks
      - 'N8N_TEMPLATES_ENABLED=${N8N_TEMPLATES_ENABLED}'
      - 'EXTERNAL_FRONTEND_HOOKS_URLS=${EXTERNAL_FRONTEND_HOOKS_URLS}'
      # Frontend and Backend diagnostics configuration
      - 'N8N_DIAGNOSTICS_CONFIG_FRONTEND=${N8N_DIAGNOSTICS_CONFIG_FRONTEND}'
      - 'N8N_DIAGNOSTICS_CONFIG_BACKEND=${N8N_DIAGNOSTICS_CONFIG_BACKEND}'
      # Disable onboarding flow if set to true
      - 'N8N_ONBOARDING_FLOW_DISABLED=${N8N_ONBOARDING_FLOW_DISABLED}'
    volumes:
      # Mounting volume for n8n data persistence
      - 'n8n-data:/home/node/' 

Step 6: Set Environment Variables

• After creating the container, navigate to the Environment Variables section and enable Developer Mode to view and edit all configurable options.

• Utilize the URLs copied from the Postgres & Redis setup to configure the respective environment variables.

final Env config will look like this example:

DB_POSTGRESDB_DATABASE=postgres
DB_POSTGRESDB_HOST=k4o4wwk
DB_POSTGRESDB_PASSWORD=Ka36bNFBdHUtmvs3ZPKk2iWx8N
DB_POSTGRESDB_PORT=5432
DB_POSTGRESDB_SCHEMA=public
DB_POSTGRESDB_USER=postgres
DB_TYPE=postgresdb
EXECUTIONS_MODE=queue
EXTERNAL_FRONTEND_HOOKS_URLS=
N8N_DIAGNOSTICS_CONFIG_BACKEND=false
N8N_DIAGNOSTICS_CONFIG_FRONTEND=false
N8N_DIAGNOSTICS_ENABLED=false
N8N_LOG_LEVEL=verbose
N8N_METRICS=false
N8N_ONBOARDING_FLOW_DISABLED=true
N8N_TEMPLATES_ENABLED=true
N8N_VERSION_NOTIFICATIONS_ENABLED=true
QUEUE_BULL_PREFIX=N8N_
QUEUE_BULL_REDIS_DB=0
QUEUE_BULL_REDIS_HOST=xsksg8s
QUEUE_BULL_REDIS_PASSWORD=Si8oa82GpHLS44lw8Ssm
QUEUE_BULL_REDIS_PORT=6379
SERVICE_DOMAIN_N8N=rmQirts0xAxkgDAd
SERVICE_FQDN_N8N=http://n8n-n4cw2c.65.19.17.197.sslip.io

Final Steps: Deploy and Enjoy N8N

• Once you have filled in your configurations, click Save and then Deploy.

• Upon successful deployment, you can start using N8N. If it's your first time, you'll be directed to the registration page to set up an admin account.

Additional Configurations and Tips

• This tutorial does not cover setting up a Cloudflare account, CNAME, Firewall, Webhooks, or Hetzner Firewall rules. These are essential for a secure and fully functional setup.
• You can rescale your server in the near future once your usage excused.
• To support N8N Project, you can also use their cloud version. which is hassle free and everything managed by them.
• If you need any help with N8N fixing and building workflows, use our GPT model made for N8N Assistance here.