A clear, repeatable folder structure is crucial for Python projects to avoid 'import hell' and ensure a predictable workflow.
The 'src' layout, where all importable code is placed in a src/ folder, is recommended for medium-to-large apps and projects that ship to production.
Placing code under src/ helps prevent import conflicts, keeps PyPI uploads clean, allows for easy package uninstallation, and provides clarity as the project grows.
While a flat layout is suitable for small scripts and demos, transitioning to a src layout early can prevent refactoring difficulties in the future.