Best practices for re-designing wordpress while current theme is still live

Hi guys,

I am giving one of my current websites a new look by re-designing it. Whilst I give it a new theme I need the old theme to still be live. What is the best way to go about doing this? The current website already has a lot of categories in use, and it all has a hierarchal structure etc that would take time at least a day or so to re-do (and the old theme preferably should be used whilst I’m redoing the site)

Should I develop this theme first locally? Then upload the theme live, then activate it THEN spend a few hours setting up the menu + front page with the current content on said live site? Is there an easier/better way?