The Best Phone Systems for Small Businesses

What Is a Business Phone System?

A business phone system is a communications platform for businesses, typically including unlimited calling, automated menus, ring groups to call multiple employees simultaneously, voicemail-to-email functionality and call recording. Types of business phone systems include Voice over Internet Protocol (VoIP), private branch exchange (PBX) and key system unit (KSU). The best phone systems for small businesses use VoIP technology, which allows you to use your business internet connection for the whole system. Business phone systems are continuously evolving to become entire communications platforms involving text, voice, and video communications, as well as collaboration between hybrid and remote team members.

Voice over Internet Protocol (VoIP) phone systems are becoming a necessary tool in modern business settings, serving as central hubs that unify communications across voice, chat and video. These cloud-based phone systems have largely replaced traditional landlines in business settings thanks to their advanced features, accessibility and cost. Most business phone providers include essential features like a phone number, voicemail, call routing, and unlimited voice calls to the United States and Canada. However, services vary widely, with some boasting advanced features that use artificial intelligence (AI) to automatically prepare and send meeting summaries with action items after each call.

Whether you’re a small business that speaks to a few clients a week or a large business with a sales team that spends most of the day on the phone, there’s a system geared toward your needs. Our best small business phone system reviews below will help you determine which solution is most effective for your needs and suitable for your budget.

A business phone system typically costs between $15 and $50 per user per month, depending on the features and level of service you select. Most providers offer plans that start at around $20 per monthly user. In many cases, advertised prices are listed with the assumption of an annual payment plan for a significant number of users. Generally speaking, the per-user price reduces by as much as 25 percent for larger businesses that purchase many accounts and commit to an annual contract. Small businesses with fewer than 10 employees should pay special attention to advertised pricing on websites that often preselect a plan with more than 20 users and annual payment pricing, which may not reflect the prices actually available to them.

Some providers, such as Zoom, offer pay-as-you-go metered pricing for calling and messaging, but this arrangement is rare. For most service providers, unlimited calling to the U.S. and Canada is included, with additional per-minute fees for international calls that vary by provider and region. Some vendors also charge a one-time activation fee for new customers.

Many companies are able to lower their monthly prices by replacing standard features with piecemeal add-ons. For a lot of businesses, this is an excellent way to reduce costs — you can skip features, such as call recording, that may not be used by everyone. You can also use add-ons to design a custom solution for your long-term communication goals. While some service providers allow businesses to mix and match plans to support different employees effectively, many providers don’t offer this level of flexibility.

Most business phone vendors sell and rent preconfigured IP desk phones and other telephone hardware that range in price from $60 to $400. However, desk phones are never required to use a cloud-based phone system.

Today’s business phone systems offer dozens of valuable features for small businesses. This is perhaps the greatest benefit of cloud-hosted systems: They have opened the door for small businesses to access a multitude of features without having to spend a ton of money. Previously, only larger businesses could afford feature-rich systems because of the capital required to install the necessary equipment. Fortunately, that’s no longer the case. Below are some of the functions to look for.

• Unlimited calling: Many of today’s cloud-hosted VoIP phone systems allow domestic calling to the United States and Canada for no additional charge. This gives you a fixed cost for the monthly service that doesn’t fluctuate based on how many calls your business makes and receives.
• Automated attendants: An auto attendant answers calls made to your business and routes them to the proper employees or departments.
• Ring groups: This feature allows you to group employees so that if a person calls needing someone in a certain group, such as your customer service team, all of the employees’ phones will ring. You can choose for phones to ring in a specific order or all at the same time.
• Voicemail: In addition to traditional voicemail service, many business phone systems offer voicemail-to-email functionality. This feature sends audio recordings or transcripts of voicemails to an employee’s email inbox so they can read or listen to their messages even if they are away from the office.
• Call recording: This gives you the ability to record calls. These recordings are then stored in the cloud or on your computer for playback later.

Other valuable features many business phone systems offer include extension dialing, call forwarding, call queues and integrations with services like Microsoft Office and Google Workspace. Some platforms also have tools that can boost a business’s collaboration abilities, such as video conferencing, instant messaging, presence indicators and online meetings.

Today’s business phone systems offer much more than a way to make and receive phone calls. Many modern solutions, including some of our best picks, are unified communications systems.

Instead of focusing solely on a business’s calling needs, unified communications systems support all of the ways employees now communicate with customers, clients and co-workers. This encompasses traditional phone calls, audio conferencing, video conferencing, instant messaging, online faxing and text messaging.

Many of these components used to be provided by different vendors. For example, a business might have had one provider for its phone system, another for conference calling and a third for video conferencing. Unified communications systems tie all these into one platform with features that may include the following.

• Phone calls: This is a traditional phone service that allows employees to make and receive calls. Most providers offer both local and toll-free numbers.
• Conference calling: Unified communications systems include a conference bridge that allows you to host your own conference calls. The number of people who can be on a call at one time depends on the provider. Some systems support five to 10 people, while others allow for hundreds of people at one time.
• Video and web conferencing: You and your employees can host video meetings with video conferencing hardware or through a computer equipped with a camera and microphone. Most of these services allow for screen sharing, which lets everyone in the meeting view documents or presentations. The number of people who can be on a video call at one time depends on the provider. It could be just a handful or as many as 500.
• Instant messaging: Many unified communications systems enable instant messaging. You and your team can send messages back and forth to ask questions and collaborate on projects.
• Text messaging: Since texting has become so popular, some solutions allow you to text from your business line. This lets your staff send text messages to customers without revealing their personal numbers. [See our picks for the best text message marketing services.]
• Virtual faxing: These systems facilitate sending online faxes rather than using a dedicated fax machine. You can send a fax to a recipient’s email or fax machine directly from the communications platform.

Having all of these tools on one platform can make communication much easier for employees, which in turn makes them more productive.

Cloud-hosted systems have driven the expansion of unified communications systems. Instead of paying tens of thousands of dollars for an on-premises system that houses these features, you can access all of them through a cloud-hosted service for a low monthly per-user fee.

There are multiple factors to consider when choosing a business phone system. First, you want to ensure the system has all the functions and features your business needs. Can it support the number of employees who need the service? Does it have all of the tools your business relies on or would benefit from?

While some businesses need only standard calling features like caller ID and voicemail, others want added functions like ring groups, an automated attendant and on-hold music. Also consider any other communication tools your business needs. Are you strictly looking for a system that allows you to talk over the phone, or are you in the market for a unified communications platform that adds functions like video conferencing and instant messaging? Your answer to this question will guide you in your search for a new business phone system.

Another factor to consider is a business phone system’s reliability. A phone system is no use if it isn’t up and running when you need it. This is especially important for a cloud-hosted solution. Ask each provider what its annual uptime percentage is. If it isn’t 99.999 percent, find out what the company is doing to correct service issues and increase its reliability. Also ask about its service-level agreements and if contracts have any uptime-related clauses. Many business phone system providers will reimburse users if the system doesn’t meet a certain uptime percentage.

If cloud-hosted systems aren’t a good fit for your business, you need a phone provider that offers on-premises solutions. With an on-premises system, your business houses all the equipment on-site instead of via cloud-hosted PBX. These setups have higher upfront costs, but not many of the ongoing monthly fees that cloud-based systems have.

Very small businesses may want to consider whether they need a true phone system with onsite desk phones. Businesses that can get by with mobile phones may want to look into a virtual phone system instead. These connect a main business number to employees’ mobile phones. When someone calls the main business number, they are greeted by an automated attendant that can transfer them to a specific employee or department, but the call is transferred to the appropriate employee’s cell phone instead of a traditional office phone. In addition to being well suited for very small businesses, a virtual phone system is also a great fit for businesses with large remote workforces as well as solo entrepreneurs.

Finally, consider what types of customer support the phone company offers. If you don’t have a full-time IT manager for your business or employees who can handle technical issues, you’ll want a business phone system provider that will be available to answer questions when you have them, preferably through multiple channels (like over the phone and via live chat) and online resources (such as knowledge bases and webinars).

Businesses in need of a multiline phone system have several options. Your choices depend on where the equipment is housed, how the connections are made and what the cost structure is, among other aspects.

The equipment that provides the functionality to make and receive calls is a private branch exchange (PBX). PBX technology, whether housed onsite at a business or in the cloud, is what gives businesses all of the features and tools unified communications systems offer, such as automated attendants, call queues and ring groups.

Landline

Landline phone systems use traditional phone system connections and wiring provided by local and regional phone companies. These systems require on-site PBX equipment that your in-house IT team maintains and upgrades. They also require a large upfront capital expenditure for all of the PBX equipment. However, landline systems are falling by the wayside as more and more phone system providers are no longer making equipment to support this model. The trend is moving in VoIP’s favor.

VoIP

Instead of using traditional copper wiring connections like landline systems do, Voice over Internet Protocol (VoIP) systems rely on internet connections to facilitate calls. This allows you to run your phone system through the same internet connection your company uses to get online. There are two types of VoIP setups for businesses: cloud and on premises.

• Cloud-hosted VoIP: Cloud-based phone systems house their PBX equipment in the cloud. This means the phone system provider is responsible for maintaining and upgrading it. To use a cloud-hosted system, all you have to do is plug your business’s configured IP phones into your local area network. These systems don’t typically have any upfront costs. Instead, businesses pay a monthly per-user fee. Costs usually range from $15 to $60 per user per month.
• On-premises VoIP: These are similar to landline systems in that the PBX equipment is housed inside your business. You are required to handle all of the maintenance for it. However, these systems still facilitate calls via an internet connection rather than a landline. This gives your business more control over how the phone system operates and allows you to install any security measures you want. On-premises VoIP solutions require a large upfront capital investment and smaller monthly fees to cover the required connections for making and receiving calls.

Virtual Phone System

Another option for businesses is a virtual phone system. These don’t require any equipment — not even office phones. A virtual system works as an extensive call-forwarding tree. You set up the system so all calls to your main business number are automatically routed to your employees’ mobile phones. You have total control over where the calls are routed and in what order. These systems have monthly fees only.

Modern business phone systems offer all the advantages with practically none of the disadvantages of older landline systems, which require expensive on-premises hardware to purchase and maintain. With a lower monthly cost, no hardware to manage and an impressive list of call management tools, a cloud-based business phone system is a very compelling option for many business owners and managers. Below are some of the benefits of using today’s business phone systems.

Go beyond making calls.

Cloud-based business phone systems do far more than make calls. They support video conferencing, team messaging, SMS and online faxing. On top of that, they offer integrations with popular business software and highly rated CRM platforms to properly manage customer data and communications across an entire business.

Enjoy communications flexibility.

Flexibility is another area where business phone systems have evolved, allowing employees to take calls on any internet-connected device — including computers, laptops, tablets, mobile phones and IP phones — that has the same functionality as a traditional-looking desk phone. Businesses can send inbound calls to all devices at one time or set up ring groups that dial specific teams or employees with a simultaneous or sequential ring setting to ensure all inbound calls are properly routed and received.

Get quality assurance.

While some traditional landline users may fear poor quality due to a bad internet connection, the reality is that cloud-based phones are on par with landline systems in terms of audio quality and reliability. The majority of business phone system providers offer uptimes of 99.999 percent and higher with service-level agreements. As part of their analytics tools, many vendors also include quality-of-service reporting, which details the level of quality for every call that’s made.