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Looking for a business phone service? This article contains everything you need to know about how to choose one. If you're in a hurry, just scroll down to see our best picks and staff reviews.
Here's a breakdown of our complete coverage:
- Best Business Phone Systems 2015
- REVIEW: Best for Small Businesses
- REVIEW: Best for Small Offices
- REVIEW: Best for Mobile Workforces
- REVIEW: Best for Call Centers
While there are an increasing number of options when it comes to communicating with clients, customers and employees, a phone call is often the best way to get your message across.
Despite the proliferation of email, text messaging and social media as forms of communication, the telephone remains a mainstay for the vast majority of small businesses.
Since so much of a business's success depends on how it presents itself, all businesses can benefit from some sort of business phone solution, said Jim Gustke, vice president of marketing at Ooma, a provider of business phone systems.
"Companies are not only marketing products or services, but marketing themselves as well," Gustke told Business News Daily. "We believe that no matter the size or type, every business should have the tools and solutions needed to present themselves in a professional manner, while maximizing their ability to work efficiently and stay connected to customers and co-workers."
While some small businesses may believe they can get by with simply using their smartphones for work purposes, Gustke thinks differently. He said even the smallest of businesses can benefit from a central business phone system, because it presents a unified face to customers, employees and partners.
"While it may be intuitive, mobile phone plans are simply not set up to offer the same business features that specifically designed business phone systems offer," he said. "For example, mobile phones can't offer a virtual receptionist to answer calls and quickly and easily connect customers with the proper company contacts, or provide important business information like hours and directions."
|Small Business Overall||Small Office||Mobile Workforce||Call Center|
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Designed for very small businesses
Forwards calls to mobile and home phones
Works for entire office and call centers
Set up in 20 minutes
Multiple service plans
Extensive feature options
Impressive mobile app
99.999 percent uptime
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Regardless of the technology a small business chooses to use, picking the right phone system remains a critical decision, said Tom Hughes, vice president of small business marketing for AT&T. He said a ringing phone is a potential revenue generator for a small business.
"Whether a brick-and-mortar, or virtual company, the right phone system connects small businesses to their customers and ensures a great customer experience," Hughes said.
To get phone service in the past, all a business needed to do was plug in its phones and start making calls. Today, however, the Internet is giving businesses a wealth of options in choosing a phone system.
In addition to deciding whether or not they want a traditional landline system, or one that leverages an Internet connection for a Voice over Internet Protocol (VoIP) system, businesses must decide whether they want to host the technology needed to run their systems on their premises or in the cloud. Businesses also need to consider the various features they require, the provider that best suits them, and the security they'll need to keep their phone lines secure.
Landline (Public switched telephone network)
Despite the increased popularity of VoIP-based phone systems, landlines, also known as Public Switched Telephone Network (PSTN), are still an option for some small businesses.
"Many businesses are still using analog phone systems connected to public switched network," Hughes said. "While IP technology is growing quickly, landline technology is still a viable option for many small businesses."
Rather than using an Internet connection, PSTNs are analog systems that run via the telephone company's traditional copper wiring.
Aaron Charlesworth, vice president of marketing and product management for Vonage Business Solutions, said the primary advantage of landline carriers is their history as the only meaningful option for accessing business telephony features and tools. He said landline systems are a reliable, time-tested solution that have infrastructure in place and that many companies are comfortable using.
"Even with the tremendous growth of the hosted VoIP space, most businesses still have copper-wire connections and use these systems," Charlesworth said. "They have adapted to the limited feature sets to serve their specific needs and are very comfortable using the systems that they know and trust."
While they may be what companies are used to, there are some drawbacks to using a landline phone system. Besides not being able to offer as many features as VoIP systems, landlines also rely on a large amount of equipment, including the private branch exchange (PBX) that's used to switch between an organization's numerous phone lines, and that needs to be constantly maintained, Charlesworth said.
"On-premise PBX infrastructure is expensive to maintain and quite often requires scheduled site appointments to resolve problems, add features, etc.," he said. "Based on the expenses of maintaining the landline system, cost of service may even be a more significant drawback than the lack of features."
David Lee, vice president of product management for RingCentral, said while many VoIP systems are easily set up and changed by someone inside the business, PBX hardware, which is another added cost, often needs a specialized technician to update it when needed.
"A PBX box can be very expensive," Lee said. "And most of those systems are very hard to configure."
In addition to a PBX box, which can cost anywhere from a few hundred to several thousand dollars depending on the number of lines a business has, a PSTN system has the added cost of the service for each phone. Rates for local and long-distance calling average about $40 per line.
Additionally, it can be quite costly to add the proper wiring for each phone line being used.
VoIP phone systems
While 20 years ago landlines were the only option businesses had, the Internet has given small businesses the opportunity to have phone systems just as sophisticated as large Fortune 500 companies.
Until VoIP technology became available, companies that wanted advanced features were forced to purchase and maintain the PBX hardware that sat between the copper lines and the phones on their employees' desks, Charlesworth said.
"This meant that in most cases these types of advanced capabilities were available only to larger businesses and enterprises that could afford to maintain the necessary infrastructure," Charlesworth said. "The evolution of business telephony into the world of hosted VoIP phone systems removed these hardware and technology limitations and opened the world of meaningful business features to companies of any size."
Rather than using the traditional copper wires that landlines use, VoIP phone systems use the same Internet connection that a company is already using to get online.
"They treat voice as just another application that runs on your building's network," said Bernard Gutnick, senior director of product management for ShoreTel.
In addition to all the same features that a landline system offers, such as voicemail and Caller ID, VoIP systems can be integrated into a business's computer system to allow voicemails to be sent to email inboxes, laptops or desktop computers to be turned into "virtual phones," and calls to be recorded and listened to them at a later time.
Charlesworth said VoIP systems also offer small businesses features that were previously used only by big companies, such as Interactive Voice Response (IVR) and call queues.
"Any company can make use of tools such as an IVR to answer and route inbound calls to the people best qualified to answer a customer's question or a salesperson with the best opportunity of closing a deal," Charlesworth said. "Customers can be placed into a call queue as they wait for a customer service representative or automatically request a return call when the next representative becomes available."
Other features offered through VoIP systems include conference calling, unified messaging, on-hold music or messaging, instant messaging, video messaging and dial by name or number directories.
"It allows users to have a lot more control over the things they do with their calls that they couldn't do before," Lee said of VoIP technology.
VoIP systems also provide businesses with detailed analytics on their employees' calls, which provides greater insight into what they're up to each day. Lee said many VoIP providers give businesses details on who their employees are calling, how long each call is, and average call times.
"You can slice and dice this information by individual employees or groups of employees," Lee said.
Another critical feature VoIP systems provide that landline systems don't are mobility tools. Since they are Internet-based, VoIP systems easily integrate with mobile phones. This allows employees the option of having their business line ring on their desk phone, mobile phone or both.
"Being able to connect a phone system with a mobile phone allows for the most efficient and flexible call handling for the small business," AT&T's Hughes said. "This leads to higher customer satisfaction and possibly more business."
Overall, Hughes said VoIP systems tend to be more flexible and adaptable to changes.
"Customers can also take advantage of these changes to improve their productivity and drive additional business," Hughes said.
While they do offer significantly more options for small businesses, there are a couple of limitations to VoIP systems. One limitation Charlesworth points out is that to use these systems, the business must have access to a high-speed Internet connection.
"However, as broadband connections become more and more ubiquitous, particularly in North America, this limitation is becoming less significant at an accelerating rate," he said.
Another potential drawback is that should a business's Internet go down, its phone system will also go down, since they are running on the same connection. Charlesworth said that's why it is critical businesses ensure the provider they choose has contingency plans in place should that happen.
He said the Vonage Business Solutions system offers a "Call Continuity" feature that automatically reroutes calls to an alternate number, such as a cellphone, in the event of a power outage or loss of Internet.
"When power and/or Internet service is restored, routing through the normal extension is automatically reinstated," Charlesworth said.
Lee said that while some might be concerned about the quality of a VoIP system and how it sounds, the technology has come so far that it's nearly impossible to tell the difference between landline and Internet-based calls. He said many consumers are already using VoIP in their homes and don't even realize it.
"It's highly comparable, if not better," Lee said of VoIP systems. "A lot of carriers have switched to VoIP- based systems and most folks can't tell the difference."
VoIP systems also have the added benefit of being significantly cheaper than landline systems. Rather than having to pay the costs of wiring a business for landline service, VoIP systems can run on the Internet connection the company is already using.
VoIP systems range from $10 a month to as much as $50 per extension. However, included in those charges are often unlimited local and long-distance calling and a bevy of features, such as video conferencing, Internet faxing, voicemail-to-email and mobile access. Those features cost extra, or aren't even available, on landline systems.
On-premises (PBX) vs. cloud-based
In addition to choosing either a traditional landline or VoIP system, businesses need to decide if they want an on-premises system or one that is cloud-based.
Since both options are very similar, the decision really boils down to whether a business would prefer to own all of the VoIP equipment or pay a monthly service fee to have someone else host the equipment for them, ShoreTel's Gutnick said.
"There is a fundamental choice now for people," he said. "But, there really is no right or wrong [answer]."
A premises-based system means that the business pays for and owns the equipment, most notably the private branch exchange (PBX) hardware that is needed to keep phone systems running.
A PBX system is the hardware that allows circuit switching within an organization's phone system, Vonage's Charlesworth said.
"PBX is simply a generic term for the telephony network that a company leverages to place and receive calls both inside and outside their organization," Charlesworth said.
In addition to the PBX systems that are compatible with landlines, there are also IP PBX systems that work with a VoIP-based phone system. Similar to the landline, IP PBX systems are owned, configured, maintained and housed by the business.
Hughes said this is a capital-intensive model because the business is incurring the expenses all at once for the PBX hardware, as well as the desktop handsets.
"The long-term advantage is that they own the system," Hughes said. "While over the long run, businesses typically will pay less with this model than for a [cloud] model, the customer takes on added responsibility for servicing their system."
Gutnick said that since a business owns the on-premises system, one advantage to this option is that the business has more of a say on the hardware it wants to use.
"You have more control over what you own and you can decide what you do for upgrades and what you want to invest in," he said.
With cloud-based systems, there is no maintenance or hardware to worry about. The service provider handles all the technology.
"We provide you with the phone numbers and we provide you with the hardware," RingCentral's Lee said of the cloud systems. "You [just] pick a [feature] tier and pay per user."
For growing businesses, the cloud options provide an opportunity to easily and quickly add new lines. Depending on how many new employees need to be added, businesses using either a landline or an on-premises system could be forced to upgrade their hardware to make sure everyone has their own dedicated line. Gutnick said with the cloud, that isn't a concern.
"The cloud is almost infinite," Gutnick said, in the number of phone lines a business can have. "It gives them the scalability to grow their business."
Another advantage to cloud-based systems is that the business can start using new features offered by their service provider without having to do anything to their hardware or system.
"By simply making changes to the software that sits in the cloud, hosted VoIP can provide meaningful new features to the entire customer base without upgrading hardware or the software on that hardware in every single customer location," Charlesworth said.
Business phone system features
While feature-rich phone systems were previously only available to large corporations, today's options are giving small businesses the same benefits. Small business owners say their phone systems are jam-packed with dozens of features that are helping make their operations more productive.
Gabriel Mays, founder of Just Add Content, said his favorite phone system feature is its ability to transcribe voicemails. Even though it is a simple feature, Mays said it comes in very handy.
"Whenever a voicemail is left, typically after hours, we'll get an email with the transcribed message," Mays said. "This lets us quickly and easily review the voicemail in a non-intrusive way."
The ability to send voicemail messages to employees' email inboxes is one of the features Brent Bodiford, marketing coordinator for 360Clean, said his company likes most about its phone system. He said after a voicemail message is left, it is time-stamped and sent to an email inbox for listening.
"This feature allows us to listen to the voicemail, and if it doesn't pertain to a certain person, then that message can easily be forwarded to another person for their listening," Bodiford said.
Antonia Drake, managing partner of the recruiting firm elby, said she finds the ability to record and review employee calls the most valuable part of her phone system. She said this feature provides her an added way of ensuring her employees are saying what they are supposed to when interacting with clients.
"This has made it possible for us to do extensive quality control, assess why our call reps may or may not be closing leads, and ensure a high level of customer service and satisfaction," Drake said.
Keeping his customers' attention with on-hold music is what Ian Aronovich, president and co-founder of GovernmentAuctions.org, finds most valuable about his phone system. He said anytime you put a customer on hold, the last thing you want is to force them to listen to silence.
"Hands down, the best feature of our phone system is our on-hold music," Aronovich said. "We have some pretty catchy tunes that retain many of our customers who have to hold the line instead of them hanging up after nothing but silence."
Eric Stauffer, owner of the website development firm C Street Media, finds most valuable the ability to transfer a local business phone number to his out-of-state cellphone.
The need for this service arose after Stauffer and his wife moved to a new state and needed a local number, but didn't want to change their cell numbers or tie themselves down to a landline since they are always out and about.
"We get two local phone numbers that forward directly to our cellphones," he said. "So despite having a California cell number, my clients can reach me at a local Seattle-area
With small business employees and workers always on the go, one of the most important features many phone systems offer is the ability to connect with mobile phones.
Rather than having to be at their desk to receive business calls, employees have the freedom with VoIP technology to take and make business calls from anywhere without the need for a business-dedicated cellphone.
Business VoIP systems offer smartphone applications and mobility features that give employees the full functionality of their desk phones anytime, anywhere, according to Charlesworth.
"Mobility tools sync them seamlessly to the main office, with caller ID registering each outbound call as originating from the main office," Charlesworth said.
In addition to outbound calls registering to the business, mobility tools allow calls that are made to an employee's business line to be transferred to their smartphone. This ensures that employees are always accessible to clients and customers, Gutnick said.
"What is the value in someone being able to find me when they want and whenever I want them to," Gutnick asked. "[Employees are] no longer glued to a single desk."
The option to have his business line ring in his office and on his mobile phone is what Michael Bremmer, CEO of Telecomquotes.com, enjoys most about his business phone system.
"My favorite feature is the 'simultaneous ring' that rings both my desk phone and cellphone at the same time," Bremmer said. "As a sales guy, I hate to miss a call, and as a businessman, I like that I can schedule it to only ring from 7 a.m. to 6 p.m. Monday through Friday, rather than my cell ringing during dinner with my family."
Gutnick said a nice aspect of these features is that employees can easily answer a call at their desk and transfer to their mobile phone if they need to leave the office but don't want to end the call.
"I can use the Wi-Fi in the building and then I can walk out to the parking lot and have the call automatically switched over to AT&T [network] without doing anything," Gutnick said.
One mobile option some VoIP providers offer is a remote callback feature. Alan Friedlander, president of ASF Financial Services, said he loves this feature because after listening to a message all he needs to do is push "8" from his mobile phone to return the call. Additionally, the person he is calling will see his office number, rather than his mobile phone number, on the caller ID.
"This saves me a lot of time, because I can return many phone calls from the convenience of my cellphone and the client will not know my cell number nor know that I am out of the office," Friedlander said.
The mobile phone options also don't force employees to use up any of their valuable cellphone minutes, according to Lee. Since the system is run through the Internet, the mobile capabilities work via a mobile app.
"All you have to do is download an application and login with your business credentials," Lee said on how the mobile tools work.
Once logged in, employees can not only receive and make calls from their business line, they can also access their voicemail company directory, send and receive online faxes and join conference calls.
These mobility features are helping employers show that their employees are always there to take care of their customers' needs, according to Charlesworth. He cites as an example a Vonage customer who runs a travel agency out of the Pacific Northwest whose agents spend a significant portion of their time at locations they promote, such as the Caribbean.
"Through the mobile, or unified communication options, these employees can take calls and serve customers just like they would sitting in the office," Charlesworth said. "Mobile solutions continue to grow in importance, particularly as businesses seek to project an 'always available' image to attract and better service customers."
While previously employees could use their personal cellphones to speak with clients when they were away from their desk, business phone system mobility tools allow workers to have that same reachability without having to give out their private numbers when they want to be contacted outside the office, according to Lee.
"It allows you to represent yourself with your business identity," he said.
Besides the value in always being accessible, there is also a significant cost savings for businesses that provide mobility tools to their employees. Gutnick said that since the tools work with the vast majority of smartphones, employers can let their employees use their personal phone and don't need to provide them with a separate business mobile phone.
"It's almost like having two phones in one," he said.
Tools like these can increase employee happiness, since it affords them the freedom to use the mobile phone they feel most comfortable with, Gutnick said.
"Why not let people bring that experience to work with a device they have a personal attachment to," he said.
In addition to the money saved on not having to buy new phones for their employees, the mobile features also allow businesses to cut down on long-distance and international-calling expenses from those workers who are always on the road.
Gutnick said traveling employees no longer need to make long-distance calls from their hotel rooms or waste their personal cellphone minutes on work calls. He said the savings can add up for those workers who regularly travel overseas.
"I am saving that expense of what people have been inherently brainwashed into paying," Gutnick said of long-distance and international-calling rates. "I can basically be accessible from anywhere and there is no cost to the company."
Since employees dealing with customers and clients no longer provide them with their personal cellphone number, Lee said business phone system mobility features also give employers more control over those clients when a worker leaves the company. He said when an employee is fired or goes to work for someone else, their phone number is easily transferred to another worker.
"You can easily switch that phone number to another person you bring in," Lee said. "It provides continuity."
Lee said these mobility tools are some of the key features businesses should be looking for in a phone system. He said remote workers are such a major aspect of the modern workforce that it only makes sense to find a phone system that gives them the freedom to work from anywhere, while maintaining their business identity at the same time.
Which phone system is right for my business?
The decision on which system to use really comes down to what resources the business has rather than the type of business it is.
Charlesworth said he would expect large companies to continue using some form of on-premises system, whether it is a landline or a VoIP system.
"Very large enterprises are likely to continue using the more traditional on-premises approach because they have the existing personnel and infrastructure that make the maintenance of the necessary hardware and system economically feasible," Charlesworth said.
For businesses in areas without high-speed Internet access, landlines remain the only option.
"Businesses located in areas that have yet to gain access to greater bandwidth will likely continue with traditional business telephony solutions," Charlesworth said.
Cloud-hosted business VoIP systems are ideal for almost any small to mid-size business with high-speed connectivity and an interest in a deeper business feature set at a better price," Charlesworth said. "With the lower cost structure and the abundance of business-class features, VoIP systems can provide a boost for aspiring SMBs."
Hughes added that cloud systems are also best for those businesses that want to take advantage of the mobility tools that are available.
"Mobility-based or virtual businesses can be well-served with a cloud-based solution that combines a mobility app with IP-based phones, thereby enabling a consistent 'business persona,'" Hughes said. "So whether the business owner or employee is on the road or at the office, they appear to be placing outgoing calls and receiving incoming calls from the office."
Phone system security
Keeping a VoIP-based phone system secure poses many more challenges than traditional landline systems do. The main concern with landline phones has always been whether or not the line was being tapped. However, since VoIP is an application running on the Internet, it inherits the same security issues that all online users face, according to Matt Ruck, vice president of the Washington, D.C.,-based IT services firm designDATA.
Among some of the top security issues that businesses need to be aware of when using VoIP-based phone systems, according to Ruck, include:
- Internet traffic: Using the Internet to route calls in and out is inherently less secure than using traditional landlines. Hackers and cybercriminals can use packet sniffers, programs that can see all of the information being passed over a network, to grab unencrypted data. If the system a business chooses doesn't encrypt the data, it can easily be stolen.
- Patching problems: Unlike traditional landline phones, many VoIP-based phone handsets need to be updated with security patches to ensure they are protected from prying eyes. Phone handsets that aren't properly patched are another entry point for hackers to steal the information being discussed on the calls being made.
- Network security: If a business doesn't have proper network security, such as gateway security, firewall configuration, patching procedures, periodic syslog review and wireless security, then the VoIP phone system will be vulnerable to a security breach.
- Denial of Service: Should a business be targeted by a Denial of Service (DoS) attack, not only will it shut down the company's Internet service, but that will also result in the loss of telephone service, since VoIP systems also rely on an Internet connection.
- Spam: Similar to an email account, VoIP systems can fall victim to spam, also known as Spam over IP Telephony (SPIT). SPIT can slow down employees' productivity by having their phones ring with unsolicited messages. SPIT also carries with it other risks, such as DoS attacks and the unauthorized use of resources, such as bandwidth.
To help protect businesses from the theft of their calling services, voicemail hacks and eavesdropping, as well as to ensure there are no open-entry points into their network, Cisco offers its clients several IP phone security tips, including:
- Properly configure calling plans and user profiles: Businesses should control who has access to their voice network by device certificate and/or username and password. Additionally, they need to restrict the types of calls on their voice network by device, user or other criteria, such as time of day.
- Physical and logistical protection: It is critical that businesses set up firewalls and intrusion- protection systems to monitor and filter unauthorized VoIP traffic, as well as track any out-of-the ordinary voice activities. Businesses using a VoIP-based system should also use domain restrictions and two-factor authentication for administrative access.
- Encrypt voice data: To ensure that important voice data isn't seen by prying eyes, businesses should take the added steps of using encryption. Cisco recommends applying encryption by segment, device or user, sinceencrypting each and every call can result in excessive network latency.
- User security policies: Businesses also want to implement strict security policies for its employees. Specifically, organizations with VoIP systems should explain their phones' built-in security features to all employees, and ensure that each employee has a strong voicemail inbox password and that they delete sensitive voicemail messages as soon as they have been listened to. Additionally, businesses should encourage their employees to immediately report any odd occurrences they see with their phones, such as a saved voicemail message that has been deleted or forwarded to an unusual number.
Choosing the best phone system provider
As the popularity of cloud-based phone systems grow, business owners have a number of provider options to choose from. For small businesses considering a cloud-based option, Adam Simpson, CEO and co-founder of Easy Office Phone, offers several tips to help ensure they get a phone system that best meets their needs.
- Accessible from anywhere: Since today's workforce is increasingly mobile and remote-based, it is important to give those employees who don't work inside your business each day the ability to connect to your phone system via smartphones and laptops. Besides giving those employees the opportunity to tap into the business's long-distance plan, they'll have the added benefit of having their outgoing calls show the company's phone number on caller ID, rather than their personal cellphone number.
- Scalable: If you are planning to grow your business, you'll want a phone system that can expand alongside you. When adding new employees, you should be able to add new lines for them by simply punching in their information in a Web interface and either purchasing them a phone or installing mobile apps on their smartphones.
- Flexible: You want to choose a phone system provider that can change when you need it to. You may wish to change the way incoming calls are handled, such as by having calls ring a group of staffers instead of going to a single receptionist. Or, maybe you'd like them answered by a virtual attendant. There may be days when your hours vary and you need to adjust your greetings, such as on holidays. Changes like these need to be quick, simple and Web-based. If they're not, you're often facing expensive on-site visits from a technician. Keep your service flexible so your business can be, too.
- Well-supported: Even if it's just for a quick question, there are times when you will need technical support from your provider. When that happens, you'll want to speak to support staff that can actually help you, rather than one that bounces you through their corporate departments. This is a harder element to quantify in advance, and your best bet is to inform yourself using reviews others have written.
- Voice codec options: Cloud-based phone services use a certain amount of Internet bandwidth in order to make or receive calls. Voice codecs are used to convert analog signals to digital ones and different codecs use different amounts of bandwidth. In the case of staff that work remotely and have limited bandwidth, a "compressed" codec offering reduced bandwidth may be desirable. This means a small compromise in voice quality, but it's usually almost unnoticeable.
Since phone systems can be a large investment, businesses will want to ensure they are getting the best price from the provider they choose.
The best way to save money is to shop around and check in with several providers before selecting one. One specific way to save money is by shopping for bundles. Instead of paying monthly fees for individual services, small businesses can often get a better deal by choosing a provider that can bundle business phone systems with added communication services.
Additionally, it is important to read the fine print when selecting a phone system provider. The last thing you want to do is choose a system you think is offering a great deal only to find out later about fees you weren't aware of.
Other pricing issues that are important to investigate before signing up with a provider include service-level agreements, setup, installation and activation fees, taxes, and surcharges.
Looking for a phone system for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free: