Hand operated characters will work well in their own little stage. You will need room to operate your tiny entertainers, without being seen. A stand may work. Many people use a curtain.  We build our stages from PVC pipe and curtains.   We have found that using snap-on buttons for the curtain allows for easier setting up and breaking down of the stage.  A simple snap and a pair of pliers will work wonders also. The snaps can be bought at any local hobby store.  Using hand operated puppets do give more life to your characters and using arm rods you can point, clap and act out with your character… it does take a little practice.   The more animated you are with your puppet the more the kids love it.  I once in just playing around put a puppet up in the window of the daycare office door and within minutes I had attracted over 35 kids to the door of the gym. They had stopped playing and begin migrating to the floor in front of where I was.  I did nothing more than act up and move around with the puppet.  Playing a simple game of hide and peek they loved it!!!!  For the next 15 minutes I entertained the kids and the daycare providers with one puppet in a doorway!!! Amazing!!!

You have to love the simplicity of it all!!!