I typically set up a separate database and a separate folder. As far as I am aware, your license allows you to run more than one instance of the software, as long as it's being used on the same domain name...
for instance, this is my live forum:
mysite.com/forum
and this is my test forum:
mysite.com/testforum
I would recommend setting up a separate folder and database.
Yes, you would probably need to do a set up in your test folder as well...but think of it this way, the more times you run the installation, the easier it becomes. The first forum I ever set up took me 5 hours, because I had no idea what I was doing...I've installed so many since then and learned all the techniques, now it takes me less than 15 minutes. The more you do it, the more comfortable you become with it. Good luck with everything

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