How to Choose a Business Phone System | Nextiva
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How to Choose a Business Phone System

Every business needs a phone service. You have customers to call, vendors to bargain with, and teams to coordinate. Sure, you can use email, smartphones, and messaging apps. But nothing really comes close to a reliable, always-on phone service purposely designed to optimize voice-based communications and help your business keep in touch with people who matter.

A phone system adds a layer of credibility, accessibility, and privacy to your business. For one thing, people expect to see actual phone numbers on the website or social media page of a legitimate business. Customers or partners sometimes need to speak with you right away and picking up a phone makes that possible.

However, solely relying on your own and your staff’s cell phones greatly undermines your privacy and exposes confidential matters to a lot of security risks. A phone system solves pretty much all of these challenges.

Not all phone systems are the same though. To know which phone system works best for your business, you have to ask several key questions:

  1. Should I use a traditional landline or subscribe to a VOIP (Voice over Internet Protocol) service?
  2. Should I use full phone systems that come with desktop hardware or just virtual phones that can be activated on any computing device?
  3. If I use VOIP, should I get it hosted in-house or go for full cloud-based?
  4. What’s the best business phone service in terms of industry, budget, employee count, office locations, and customer base?

Here’s a simplified comparison table that describes key characteristics of the two main phone system types — the traditional landline and the internet-based systems:

Traditional Landline Phone System VOIP Phone Service
Description Uses cabling made of copper wires to transmit sound. These wires go overland via utility poles and underground and overseas via transmission cabling. Transmits sound as data using an internet connection. Also called cloud-based, internet calling, and IP phone system.
Cost Setup and running costs are relatively high.

Will include service and maintenance fees as well as long distance charges. Companies with large systems may require an inhouse or contractual staff for maintenance.

Has generally lower setup and running costs compared to landline. Usually involves a flat monthly fee charged by the service provider; rarely requires additional service/maintenance fees; no need for dedicated admin staff.  
Reliability Has been around for centuries and provides a very stable, reliable service. Unless you use complex networks and devices, a landline phone system won’t go down during power outages. But if it does go down, getting it back up can be very challenging and requires days to resolve. Generally reliable (as your Internet connection and power utility service allow), with wide variation depending on service provider. Power outages will cut your ability to make or receive calls unless you have a backup power source or a set of self-powered devices (like mobile phones and tablets) on hand.  
Mobility You need to be onsite to make or receive calls. You can use VOIP apps from the service provider to enable any device to receive or make calls anywhere you are.
Scalability Would require physical, time-consuming, and often costly modifications whether you are downsizing or expanding.   Can be done very easily either way using the service dashboard or portal.
Feature Set All you get is pretty much just a basic telephone. Upgrades can include call waiting, call forwarding, caller ID,  call rejection/blocking, last-call return, long-distance calling, three-way calling, fax, and voicemail. All the features of an upgraded landline service plus video conferencing, chat, mobile apps, call-routing, single contact number for multiple simultaneous connection, integration with other systems such as email, calendar, CRM and ERP software.

Identifying the Right Phone System for Your Business

When deciding to install, upgrade, or replace a business phone system, you need to consider several key factors. First, consider your business activities, expected call volume, goals, and budget. Does your business heavily depend on voice calls or does it run fine with a minimal telephony requirement? What are your plans for strategic growth?

Do you employ a hyperactive sales team? Do you need to integrate a phone system with your digital/software resources? If you need to engage more customers to expand, then a reliable phone system is a baseline necessity.


This might be the primary factor affecting many phone system-related decisions. Reliability should come first but if this is the top item on your agenda, then you can find affordable landline or VOIP bundles for your business.

If you do not have a system in place yet, going for VOIP systems is the smarter option. That’s because the setup, long distance, and running costs for VOIP phone systems are generally lower compared to landline services. However, if you already have a traditional system in place, you can go for an upgrade or a hybrid system depending on your business needs.  

Related: How Much Is A Business Phone Line?


To run a good business, you must have reliable and accessible communication channels for teams, vendors, partners, and customers to use. Without this, business continuity will be compromised and you will lose the confidence of people running or relying on your operations as well as potential revenue that could have been generated during downtime.

Review the risk management, fail-safe policy and backup plans of service providers before signing up.


A business phone system should also be fully secured to prevent fraud, malware, and phishing attempts by hostile entities. Note though that security not only involves the phone service per se but also your own internal resources. Partner only with bankable service providers with tried and true encryption, authentication, redundancy architecture, and other security systems.


Smart and successful companies almost always have greater mobility than their peers. VOIP phone systems enable you to make and receive calls anywhere, even when you are offsite. In contrast, traditional phone systems require you to be in the office to use the phone.

Go for services that provide mobile and desktop apps that enable your staff to connect with teams and customers anytime and anywhere they are.


Some landline systems enable three-way calling. VOIP services offer a lot more. These include video conferencing for unlimited participants and integration with collaboration and productivity tools, including CRMs and email.  


Businesses need operational agility, whether they are expanding or downsizing. During these periods, resources should be reconfigured to match the scale of the business operations where they are being used. The ease with which such reconfiguration can be implemented impacts productivity among other performance measures.

Related: How Many Phone Lines Do I Need for My Business?


You’d always want top-notch customer service support for your business. Go for service providers with a clear track record of excellent customer support.


Landline phones have practically stopped evolving and will likely go obsolete down the road. If you need to future-proof your communication systems with all the emerging features that will become imperative later on, then going for a robust VOIP system is the right move.

With a VOIP service, you can integrate telephony with your business technology platforms such as email, video conferencing, virtual faxing, productivity, employee training, ERP, and CRM software.

Common Phone System Types

As discussed previously, there are two main phone system types based on connection: landline and VOIP. However, there are subtypes and hybrid variants you should also know about:

  1. Virtual Phone Systems are software-based solutions packaged as browser-based, desktop, or mobile apps that allow you to make and receive calls via the Internet. Also called softphone.
    • Pros:  Affordable and very easy to install, deploy, and use
    • Cons: Not a full-featured phone system
    • Best For: Small businesses on a tight budget and for businesses with staff or contractors deployed in multiple locations.
  2. Landline Phone Systems use copper wires to transmit voice communication. Also called analog phone.  
    • Pros: Very stable and reliable
    • Cons: Comparatively costlier to set up, maintain, and scale; Might become obsolete down the road
    • Best for: Small businesses that already have a landline and do not require telephony upgrades; People who likes vintage technology
  3. VoIP Phone Systems transmit voice as data over the Internet.  
    • Pros: Wide range of capabilities, features, and software integrations that are critical to most businesses today; can be scaled easily;  affordable
    • Cons: May be disabled in case of power outages unless you have emergency power supply or the provider has fail-safe capabilities
    • Best for: forward-looking businesses of all types, sizes, and industry
  4. Cloud and on-premises systems are VOIP systems whose only difference is the location where the Phone Branch Exchange PBX is hosted. Also called IP-PBX, on-premises systems involve a LAN-connected main server (located in the customer’s location) that receive and transmit calls via a traditional landline as well as the Internet. On the other hand, cloud or hosted PBX systems refer to VOIP systems whose PBX is hosted by the provider.  
    • Pros: Cloud-based PBX are generally less costlier to set up and maintain
    • Cons: In on-premises systems, maintaining the PBX is a responsibility of the service subscriber.
    • Best for: On-premises systems are great for teams that seek greater control of their communication tools; Cloud-based systems are good for businesses who do not want to assume the added responsibility of managing their own PBX.

Related: How Do I Get a Business Phone Number?

Best Practices When Choosing a Business Phone Service

Here are a few tips that will help you identify the best phone system for your company:

  1. Understand why you need to upgrade, install, or replace a business phone service.
    1. What are your goals?
    2. Which system — if any —  do you use currently?
    3. Which specific features and capabilities do you need in a telephone service?
  2. Assess the current and potential call volume for your business based on employee count, office locations, and voice-based engagement with customers, vendors, partners, teams, and other stakeholders.
  3. Consider your scalability options when it comes to future growth. Go for a service that fits your strategy.
  4. Make an audit of the resources, platforms, and technology stack with which you want to integrate the phone service. Determine if the local internet service is of adequate quality and speed for VOIP solutions.
  5. Allocate a reasonable budget for the phone system.
  6. Scour the telephony systems market for a service or provider that match your budget and operational needs.
  7. Research the track records of service providers specially their reputation when it comes to reliability and customer support.
  8. Snoop around and discover which systems/service providers are being used by industry leaders.
  9. Make a shortlist of your options.
  10. Request for demos and try/stress test the shortlisted services before signing up.


There are many reasons a business needs to upgrade its phone systems. Perhaps you want more capabilities or a greater degree of mobility. Perhaps you want to cut costs or replace legacy systems that will soon become obsolete in your industry.

Whatever the reason is in your case, the key is to clarify your goals, understand your options, and partner with the right service provider.

About the author

Drew Hendricks is a business technology and social marketing specialist. Drew has also written for many major publishers such as Forbes, Entrepreneur Magazine and The Huffington Post. Drew has also worked with a variety of different startups around the globe as well as larger advertising agencies in the United States and the UK.

Contact an Amazing Service
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(800) 799-0600

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the way you communicate.

Contact an Amazing Service
Sales Expert
(800) 799-0600

See how Nextiva will transform
the way you communicate.