I've worked on 100% remote teams for the past 5 years. The first company was ~8 people, and the second is 5 people. I'm a huge advocate of allowing people to work from home.

Other people have done better work laying out the benefits of remote work than I could, but here's some food for thought:

- Remote workers get an instant boost in work-life balance that doesn't cost the company anything. They have no commute, and they can choose to live in less expensive areas. Those are huge happiness boosts and also a great way to retain employees, since few companies allow remote work.

- Costs for office space go down.

- Studies have shown that people hate open offices and are less productive in them. Productivity is greater when people can have a quiet, private space to make phone calls or just think. Office space with individual offices for each employee are expensive and rare.

- You can hire from anywhere. My company currently employs an excellent senior developer who refuses to leave his home in small-town North Carolina. We pay him far less than he would make in NYC or SF, so both he and our company win.