The other issue - in the US at least - is a home office and OSHA requirements the business is still required to fulfill.
My ex worked from home for a year whilst setting up a new branch for his company. The company had to pay rent on a spare bedroom for him to set up his office, and send out an inspector to make sure it complied with the rules for telecommuters. Then, there was insurance on his office equipment, himself (in case he fell ill or got hurt in his workspace or whilst out of calls), etc. It was still cheaper than renting office space, and it worked for his particular case, b/c he just did it from home until there were enough clients to justify renting a full on office, but it may not be as straightforward for some places.