There are lots and lots of advantages in using a domain, but the most obvious ones have always been the same since Windows NT: centralized user management, automated authentication between domain machines and access management. What this basically means is that you can create and manage user accounts in a single place, that those accounts are automatically recognized by all domain machines and that you can give users (and groups) permissions on certain resources.
This makes a lot easier and manageable even the most basic scenario of file (and print) sharing, i.e. "we store files on a shared folder and we need to be able to choose who can access what", which can quickly become a pain in a workgroup environment, even with less than 10 users.
The main disadvantages are that you will need at least a server to act as the domain controller for the domain (but in a small business environment this can be done by a server also doing other things, like file sharing), that you will need to learn how to manage domains (which for basic management is not such a complex thing), and that you will need to take care of your domain controller, because not having it available will have a very bad impact on all domain computers (that's why usually at least two of them are used).