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When it comes to the success of your business, no decision can be taken lightly.

The phone system you choose can make or break your business, so it’s important you make the right choice. In today’s digital world, technology is moving fast. Telephony is no exception.

Nowadays, there are countless business phone solutions on the market. Choosing the right one to suit your specific business needs can prove challenging; especially if you aren’t aware of the different types of small business telephony systems on the market.

There are many things to consider. Should you choose a landline or VoIP system? What functionality do you require to ensure your business communications run smoothly? How much are you willing to pay?

In this article, we’ll help you to answer all of these questions and more. We’ll cover the different types of phone systems, the capabilities they provide, and their advantages and disadvantages. The world of business phone systems is more complicated than you might think! So grab a drink, get comfortable, and get ready to become a business phone expert!


What are Business Phone Systems?

business phone system refers to a multiline telephone system that’s typically used in business environments. Most likely, the business you operate or work for already has a telephony system installed. Business phone service encompasses a range of phone systems with varying types of technology.

Types of small business phone systems

There are three main types of phone systems for small businesses.

  1. On-premise Private Branch Exchange (PBX): The traditional landline phone system. The PBX box resides on business premises and calls are made with digital lines.
  2. VoIP PBX: Similar to a traditional PBX, but calls are made via an internet connection. One of the best PBX systems for small businesses.
  3. Hosted PBX‍: No box or on-premises equipment required. Calls are made via a robust cloud telephony platform for increased flexibility. Requires a high-speed internet connection to function. See what Nirvanix has to offer for hosted PBX services

Let’s take a closer look at the development of business phones.

The revolution of business phones

Until recently, business phones operated via a private branch exchange (PBX). This meant businesses had to register a toll-free number in order to provide customers the service they demanded. Most business experts agree that the toll-free business phone number is becoming obsolete as it incurs unnecessary costs at the business’s expense.

Legacy phone systems still exist in today’s business world, however, most modern businesses are making the switch to VoIP or Hosted PBX systems for the convenience, flexibility, and scalability they offer.

With the advent of voice-over-internet-protocol (VoIP), businesses saw a much more convenient and cost-effective solution to their telephony needs. VoIP technology makes it possible for people to make calls over the internet, mitigating the mobility and cost-efficiency challenges posed by the traditional analog phone.

A VoIP phone provides all the great capabilities of the traditional legacy phone services, like great call quality and calling features, including call screening and music on hold, while also offering a range of modern communication tools for improving communications among a business’s employees and customers.

Moving to the cloud

Business phone systems have been completely revolutionized by the cloud. A cloud-based business phone service uses VoIP technology to facilitate calls over the internet rather than traditional landlines.

All information is stored and hosted in the cloud by an offsite third-party service provider. This means there’s no need for copper wiring, expensive hardware, or other equipment to be installed and maintained by the business in question. Instead, the service provider takes on all that responsibility so you don’t have to!

VoIP and cloud phone systems are used to refer to business phone services that are hosted on the cloud. Moving to the cloud allows small businesses to benefit from:

  • Greater flexibility: Business teams can connect and collaborate seamlessly with a centralized communication channel and data center. Cloud telephony services make it easy for remote workers to effectively work from anywhere. Businesses can enjoy the flexibility to work in ways —and from places— they never have before.
  • Increased mobility: In today’s modern world, work doesn’t only take place in the office. Remote work is on the rise, and cloud-based phones enable remote workers and dispersed teams to tune in from anywhere. They can join a video conference from the other side of the world (free!), or collaborate on a project or task with instant messaging. Business phones can be used on an app with iOS and Android cell phone devices, tablets, or another internet-enabled portable device, so users can stay connected wherever they are.
  • Cost-savings: With no installation and maintenance costs, cloud-based solutions are much more cost-effective than traditional ones. As a business, you’ll just pay for what you use. This usually means paying on a per-month basis, and the costs depend on the functionality you require.
  • Scalability: Cloud phone solutions grow as your business grows. You’re not limited by physical location or equipment. Instead, business owners can add or remove a user or phone number from the easy-to-use dashboard. What’s more, the per-month payment plans can easily be changed, so when it’s time for your small business to level up – you can access all of the capabilities and calling features you need.

Unified Communications as a Service (UCaaS)

A business phone service is usually sold as Unified Communications or UCaaS. This modern solution allows businesses to access and manage all of their internal and external communications with a single online portal. UCaaS is a business phone system that unifies voice, video conferencing, instant messaging (SMS), advanced calling features, app integrations, and more.

It’s the most convenient VoIP business phone for modern businesses, as it provides robust company phone features and toll-free calling in a unified office phone system. Usually, with UCaaS, companies pay per month per user or start with a basic plan that can be scaled up as the business grows.

It’s certainly true that business phones aren’t what they used to be. Which is a good thing! No longer are companies limited by their legacy business phones. Instead, users can enjoy all the benefits of cloud-based VoIP systems at a fraction of the cost of their old system. Technology is rapidly advancing, and so too is the wealth of automated services that can be integrated with a business phone. Features like IVR, predictive dialing, skills-based routing, and CRM integrations make the whole telephony experience more robust, efficient, and effective.

Key Features of Small Business Phone Systems

As a small business, there are some VoIP phone features that can help you to grow your business with exceptional internal communications and customer service.

1. Call volume and scalability

The first thing to consider is how many people will be using your phone system. The service must be able to cope with the number of callers you receive every day, otherwise, you might end up frustrating, —or worse— losing customers. A VoIP system offers unlimited calling to any toll-free number, or to any other internet-connected device.

The initial call volume you select is important, however, you’ll need to ensure that your small business phone can grow as your business grows. Consider whether hiring and onboarding new staff costs a lot, or is a hassle, as well as if adding a new phone number is difficult. Most cloud phones offer excellent scalability, and you can scale your phone lines and users up and down as you wish.

2. Auto Attendants

An Auto Attendant (or automated attendant) refers to a voice menu system that the caller is presented with. It allows callers to be transferred to the right extension without first having to speak to a telephone operator or live receptionist. This feature is also called a digital receptionist.

A digital receptionist has several benefits for small businesses. It can streamline your customers’ experience by providing a professional greeting; call routing to the best available agent or department; call routing to a cell phone or twinned desk device; and voicemail to email.

Of course, an auto-attendant isn’t a replacement for a real person. Moreover, a digital receptionist can complement a real receptionist by making their job much simpler with sophisticated routing, preventing long call routing, and enhancing the customer’s support journey.

3. Voicemail

Most office phone systems are equipped with this feature. However, cloud phones take it to the next level. VoIP systems allow for remote voicemail access, so users can check messages from the office or on the go, from any device with an internet connection. They also offer the capacity to record multiple greetings to provide customers with a more personalized experience.

Another excellent feature of an office phone is voicemail transcription, which allows users to send voicemail to email where they can read and reply directly. This is a huge time saver!

4. Audio/video conference calling

Usually calling overseas landlines is expensive, but VoIP provides a toll-free calling solution that can extend to more than one user. Moreover, if lots of people are talking at the same time you’ll want to make sure the solution you choose can handle it without compromising on call quality.

Most modern office phone systems offer video conferencing functionality. This allows you to communicate via video call with a limited or unlimited number of participants, depending on the provider and your chosen payment plan.

Video calling can transform the way your business communicates. It’s particularly useful for remote team communication and collaboration, as teams can essentially talk face to face as though they were in the same office.

5. Advanced calling features

There are some advanced calling features you might want to consider to boost business communications. If you run a call center, advanced calling features can be hugely beneficial for improving call center agents’ efficiency and increasing customer satisfaction. Some advanced calling features to look out for include:

  • Call routing: Calls are placed in a queue and routed to specific agents, departments, or groups based on pre-established criteria.
  • Call recording: Records calls and can be used to train new or existing employees and gain insight into how employees handle calls.
  • Call reporting: Provides concrete metrics that can influence business operations down the line. View metrics like average talk time, wait time, and more.
  • Call forwarding: Call forwarding enables users to redirect calls to another destination.
  • Caller identification (caller ID): Caller ID transmits the caller’s phone number to analog phones, IP phones, or mobile devices. This means that you know who’s on the line when you receive calls.
  • Call waiting:  Call waiting allows you to suspend the call in progress to accept another one. You can then switch between calls.

6. Mobile-friendliness

Your small business needs the flexibility to succeed in today’s modern business world. The phone service you choose should seamlessly integrate with desktop and mobile devices, allowing employees to work from anywhere, even a mobile app! Read more about the wonderful world of mobile VoIP.

Benefits of a business phone system vs a traditional phone system

So, now for the question on everyone’s mind! How do business phones and normal (traditional) phones stack up against each other? Let’s take a look at some of the key benefits of a VoIP phone and a traditional landline phone, and how they compare.

Pros and cons of VoIP services

Some of the pros of installing a business phone system include:

  • Low cost: The main goal for any business is to make money, right? It doesn’t hurt to save a few pennies along the way either! With VoIP, you’ll save more than just a few. VoIP phones operate via the internet. This means you only have to pay for a high-speed internet connection, and the service provider takes care of the rest. VoIP phone service is a budget-friendly option for any small business or enterprise as international calls with VoIP service are completely free. Read our next post to find out how much business phone systems cost.
  • Better functionality: VoIP solutions typically offer greater function than landlines. Users can communicate via voice, video, and text messaging for a more robust collaboration experience. Moreover, they often host a range of advanced calling features including call analytics, call routing, call waiting, and voicemail to email transcription. These features enable you to provide better customer service that boosts customer satisfaction and retention rates.
  • Increased flexibility and accessibility: There’s a global shift towards remote work occurring. An IP phone service provides remote workers with the flexibility to tune in from anywhere, offering greater flexibility. Moreover, an integrated business phone solution keeps all of your business communication needs in one place. This saves you, your employees, and your customers time and frustration when it comes to operating your business, so you can spend more time on the things that matter.

Despite all these great features, there are a few downsides to VoIP.

  • Internet dependency: What happens to your business phone service if your internet connection goes down? This is a possibility, which is why it pays to invest in a robust internet provider that guarantees consistent high-speed connection.
  • Emergency calls: A con of VoIP services is that they aren’t guaranteed to support emergency calls due to their flexibility and the difficulty of tracing them.

Pros and cons of landline phones

The main pro of normal phones is that that they’re reliable.

As the connection uses wires they offer consistency and reliability that a service provided over the internet doesn’t. Although complete internet outages are rare, with a traditional phone you don’t have to worry about the connection dropping. On the other hand, this can also result in poorer sound quality. When disaster strikes, landlines tend to remain functional or are more easily fixable, which can reduce company downtime during a catastrophe.

The disadvantages of landline phones greatly outweigh the advantages in today’s technology-driven world. Telephony is moving fast, and it’s moving in the opposite direction to analog phones!

With normal phones, you must be on the premise where the service is hosted to make and receive calls. Instead, with IP telephony you can make calls from anywhere in the world.

The main disadvantage of landlines is that they’re much more expensive than VoIP phones. Not only do you need to pay for equipment, hardware, and the maintenance required by your PBX system, you’ll also incur extra costs when you add more advanced features. What’s more, you’ll need to provide your customer base with a toll-free number they can call for support, which will result in extra charges per month.

What are the best business phone systems?

There are countless VoIP service providers out there. If you want to find the right one for your business, you’ll need to consider how the service they offer aligns with your business’s needs.

Let’s take a look at some of the best-renowned business phone providers: Ooma Office, Aircall, and RingCentral.

1. Ooma Office

Ooma Office is a VoIP solution that’s aimed at small businesses operating on tighter budgets. Ooma Office provides all the integral features of a business phone and plenty of extra features to boot.

With Ooma Office, businesses can benefit from mobile apps for iOS and Android devices that allow you to set up call forwarding, so calls can be redirected to your mobile when you’re on the go. If you’re looking for great functionality on a relatively well-priced subscription plan then Ooma Office is the way to go. Moreover, Ooma Office is easy to set up, so you and your team can get set up straight off the bat.

2. Aircall

Aircall is a cloud-hosted UCaaS solution that provides businesses with voice calls, video, and messaging across various devices. It also offers plenty of extra calling features and business app integrations to improve your business communications.

Aircall can be set up in just a few steps and is well-suited to sales and support teams. It’s a cost-effective solution for small businesses. Pricing starts at $30 per month per user and increases to $50 per user per month to access more of Aircall’s functions.

3. RingCentral

RingCentral is one of the world’s leading communication platform providers. They offer a variety of internet telephony solutions, including UCaaS, that cater to business needs. Whether you’re looking for a solution to connect your team, or a robust contact center solution – RingCentral has it.

RingCentral Office is their most prolific solution. It combines high-quality voice and video calls with messaging, business application integrations, and countless features to boost communications.

Can small businesses benefit from a business phone system?

The short answer? Yes, they can.

As a small business, it’s important to find a solution that suits your business needs as you grow. There’s no point investing in expensive equipment that’s costly to operate and maintain when there’s a much more efficient, cost-effective solution on the market that’s available to modern businesses of any size and shape.

Switching from a normal phone system to a VoIP-hosted PBX will provide your small business with the flexibility, scalability, and functionality it needs to build an audience, grow, and remain competitive in today’s market.