...and maybe even subfolders.
For example, on home computers many people use the 'Documents' folder as a Cabinet for all their documents, spreadsheets, and PDFs; the 'Pictures' folder as a Cabinet where they save photos and screenshots; and the 'Music' folder as a Cabinet for songs and audiobooks. Each of those Cabinets is likely to be subdivided into folders and subfolders.
Note that Cabinets do not overlap -- no Cabinet is contained within another Cabinet. And ideally a Cabinet only contains files saved by you and others on your network -- it does not contain system files and program files. So it would be a bad idea to treat your entire hard drive as a Cabinet, because thousands of system files and program files would be included.
In an office setting, there might be a single Cabinet where all user-created files are stored (maybe the entire X: drive on the main server). Or there could be several Cabinets spread across multiple drives and servers (personnel files in the HR folder on the Z: drive in Boston, accounting files in Y:\Firm Data\Financial in Sydney, and client files in \\Server1\Shared\ClientDocs in Peoria).
...where you've not yet saved anything yet.
Existing Location: If there's already a place on your computer or server where you've been saving files, and you're pretty happy with the way subfolders and files within it are named and organized, then go ahead and turn it into a Cabinet. Snapfiler will make it easy to work within that existing structure, and to maintain and refine it moving forward.
New Location: If you're unhappy with the way you've been organizing and naming files and you want to start fresh, imposing some much-needed order on a chaotic system, you should probably create a brand new empty folder somewhere on your computer or network, and use it as your first Cabinet. Snapfiler will help you build and implement a sensible structure that's easy to enforce and maintain. New files will be saved into the new location, and you can always go back and move old files from their old locations to the new location when and if it makes sense.