diff --git a/.gitignore b/.gitignore
index 1c41f42..5a39df8 100644
--- a/.gitignore
+++ b/.gitignore
@@ -36,3 +36,6 @@ archive
 
 # any log file
 *log.txt
+
+# ignore all project files
+projects
\ No newline at end of file
diff --git a/README.md b/README.md
index 40899bb..6fff452 100644
--- a/README.md
+++ b/README.md
@@ -24,12 +24,13 @@ GPT Engineer is made to be easy to adapt, extend, and make your agent learn how
 - `export OPENAI_API_KEY=[your api key]` with a key that has GPT4 access
 
 **Run**:
-- Create a new empty folder with a `main_prompt` file (or copy the example folder `cp -r example/ my-new-project`)
+- Create a new empty folder with a `main_prompt` file in the `projects` folder (or copy the example folder `cp -r projects/example/ projects/my-new-project`)
 - Fill in the `main_prompt` in your new folder
 - Run `python -m gpt_engineer.main my-new-project`
+  - Optionally pass in `true` to delete the working files before running
 
 **Results**:
-- Check the generated files in my-new-project/workspace
+- Check the generated files in projects/my-new-project/workspace
 
 ### Limitations
 Implementing additional chain of thought prompting, e.g. [Reflexion](https://github.com/noahshinn024/reflexion), should be able to make it more reliable and not miss requested functionality in the main prompt.
diff --git a/gpt_engineer/main.py b/gpt_engineer/main.py
index c03ed7f..1aeabc2 100644
--- a/gpt_engineer/main.py
+++ b/gpt_engineer/main.py
@@ -2,8 +2,9 @@ import os
 import json
 import pathlib
 import typer
+import shutil
+
 
-from gpt_engineer.chat_to_files import to_files
 from gpt_engineer.ai import AI
 from gpt_engineer.steps import STEPS
 from gpt_engineer.db import DB, DBs
@@ -14,7 +15,8 @@ app = typer.Typer()
 
 @app.command()
 def chat(
-    project_path: str = typer.Argument(str(pathlib.Path(os.path.curdir) / "example"), help="path"),
+    project_path: str = typer.Argument("example", help="path"),
+    delete_existing: str = typer.Argument(None, help="delete existing files"),
     run_prefix: str = typer.Option(
         "",
         help="run prefix, if you want to run multiple variants of the same project and later compare them",
@@ -24,9 +26,14 @@ def chat(
     steps_config: str = "default",
 ):
     app_dir = pathlib.Path(os.path.curdir)
-    input_path = project_path
-    memory_path = pathlib.Path(project_path) / (run_prefix + "memory")
-    workspace_path = pathlib.Path(project_path) / (run_prefix + "workspace")
+    input_path = pathlib.Path(app_dir / "projects" / project_path)
+    memory_path = input_path / (run_prefix + "memory")
+    workspace_path = input_path / (run_prefix + "workspace")
+
+    if delete_existing == 'true':
+        # Delete files and subdirectories in paths
+        shutil.rmtree(memory_path, ignore_errors=True)
+        shutil.rmtree(workspace_path, ignore_errors=True)
 
     ai = AI(
         model=model,
diff --git a/example/main_prompt b/projects/example/main_prompt
similarity index 100%
rename from example/main_prompt
rename to projects/example/main_prompt