Follow the below 7 steps to create a Test or Demo site on your server.

1. Create a subdirectory: Create a Subdirectory on your server where you want to create a “Test” site.
   

   cd /home/domain/public_html/
   mkdir test

2. Copy all Magento files from public_html directory to the newly created “test” folder
   

   cp -r /home/domain/public_html/* /home/domain/public_html/test/
   cp /home/domain/public_html/.htaccess /home/domain/public_html/test/

3. Create a new database for test site: Test environment will use a separate database, So we need to create a database as well. This can be done in the control panel of your hosting account. for ex: test_db
4. Export the database: Now we need to export the current Magento database. You can use phpmyadmin to export the database or you can use the below command to export the database.
   

   mysqldump –insert-ignore –single-transaction -u[USERNAME]  -p[PASSWORD] [DB_NAME] | zip > dump.sql.gz

   Notes : You need to replace the SQUARE BRACKETS values with your values.

5. Import the database: Now we need to import the database which we have export in above step. you can import the database from phpmyadmin IMPORT tab or you can do that with the following command also.
   

   gunzip < dump.sql.gz | mysql -f -u[USERNAME] -p[PASSWORD] [DB_NAME]

   Notes : You need to replace the SQUARE BRACKETS values with your values.

6. Change the base_url: You must have to change the base-URL in the Magento database table called “core_config_data”.
   

   UPDATE core_config_data SET value=”http://www.domain.com/test/” WHERE path=’web/secure/base_url’;
   UPDATE core_config_data SET value=”http://www.domain.com/test/” WHERE path=’web/unsecure/base_url’;

7. Clear the cache: Last step is to clear the cache. you can do it from the following directory.
   

   “/home/domain/public_html/test/var/”