Small Modular Reactors (SMRs) based on established light-water technology have gained a lot of attention from the nuclear industry; however, the potential that SMRs have to reduce the cost of nuclear construction has been under-studied. Modularisation is a cost reducing mechanism where a SMR power plant is subdivided into smaller units, or modules. These modules can be produced offsite in a controlled environment, potentially offering cost reductions that offset their apparently higher capital costs. This paper will investigate the effects modularisation and standardisation might have on SMR capital costs. Modularisation and standardisation not only reduce direct and indirect costs, respectively, but also enable activation of other cost-reducing mechanisms, such as shifting construction work from site to a factory, transferring learning between tasks, and achieving economies of multiples. It will show that constructing a SMR using the same methods as current large reactors is not economically feasible and will demonstrate how modularisation reduces SMR capital costs. The primary constraints on module size are imposed by weight and height transport limitations, linking reactor size to ease of modularisation. This leads to an analysis of which SMR components and structures should be targeted for modularisation in order to achieve optimal cost benefits.