In a lot of projects, this is usually done via README. It tells you what running dependencies to install and how to run certain commands.
This can get harder to maintain as things change, the project grows, and complexity increases.
I see two parts to automate here: actually setting up the environment, and running the application or orchestrating multiple apps.
How do you address this?
Typically using Lando which is a frontend for docker-compose which makes it easier for the users unfamiliar with docker to use it to spin up their environments.