Is it viable to have two separate businesses (baked goods and a nail salon) in the same location? What challenges could I face?

Hi. I am a business coach and mentor and have started a number of successful businesses.
There is no reason why you can't have two different businesses in the same location.
There are two questions I would ask:
Will the two businesses work to complement each other?
Are there aspects of either business that will adversely affect the other?
E.g. The smell of nail products/cleaners in the same area as fresh food products.
Could there be questions of hygiene, depending on how the space is separated?
I hope this helps give you food for thought.
Regards
Rick

Well depends whether there any synergies or not :)

If you can get lower rents because you have 2 business in the same locatin then there is at least one big benefit.

Other ones are:
1. opportunities to do some cross selling. You can give coupons for customers of nail salon to the baked goods and vice versa
2. you can share people - with 2 business (especially if they have different seasonality you might be able to optimize better usage of people)
3. any business in your vicinity generates some additional traffic
4. you can get some savings on buying services: accounting, loans etc,
5. you can have joint loyalty program

Drawbacks: for every business you need different skills and some overheads that cannot be share. In some cases may make more sens to have the same business in 2 locations than to have 2 business in one location

For sure also have a look at ways to boost the value of the customers. Here are 19 practical examples: https://medium.com/@asengyczew/19-best-ways-to-boost-your-ltv-the-ultimate-guide-61b9417fd779

Hope it helps

Take care
Asen