That's a good reference.
In adding to zoning, there are other factors that contribute to the large number of viable tiny businesses here in Japan. One is that small shops aren't bound by as strict accessibility and fire regulations as in some other countries. A restaurant or bar, for example, that seats no more than a dozen customers and is staffed by just one or two people will often have a correspondingly tiny restroom that could not be accessed by someone in a wheelchair; the shop itself might not be wheelchair accessible, either. And often there is only one exit, the front door, even for shops on upper floors of buildings. In many cases, I suspect, adding requirements for wheelchair accessibility and a separate fire exit would increase the construction costs and unproductive floor space so much that the shop would no longer be economically viable.
I was a freelancer here for twenty years. While I didn't run a shop, I did run my business out of my home, and my impression was that it was much easier to do that in Japan—in terms of taxes, relations with neighbors, etc.—than it would have been in the United States, where I was born.