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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 your own reliable, business phone system that is purposely designed to optimize voice-based communications and help your business keep in touch with people who matter. Plus, having a business phone number makes your business look credible — people expect to see actual phone numbers on the website or social media page of a legitimate business.

Not all phone systems are the same, though.

To know which phone system works best for your business, you have to ask yourself several key questions:

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

Quick overview:

Here’s a table that compares key characteristics of the two types of office phone systems.

What is the difference between a landline vs. VoIP business phone system?

How to Identify 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.

Here are the top factors you'll want to review when comparing business phone providers:

  • Cost
  • Reliability
  • Security
  • Mobility
  • Scalability
  • Support
  • Included features

Cost

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 Does a Business Phone Line Cost?

Reliability

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.

Security

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.

Mobility

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.

Collaboration

Some landline systems allow 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.

Scalability

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.

When thinking about stability of your business, here's why it matters for the type of business phone system you choose:

  • 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 an energetic sales team?
  • Do you need to integrate a phone system?
  • If you need to engage more customers to expand, then a reliable phone system is a necessity.

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?

Support

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.

Included Features

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

Related: How to Set Up a Virtual Phone System (4 Easy Steps)

Common Business 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

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. It's also called an 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

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.
    • What are your goals?
    • Which system — if any —  do you use currently?
    • 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.

Related: The Complete Guide to Writing the Perfect VoIP RFP

Still Have Questions?

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 internet phone service.

About the author

Jeremiah Zerby started from the bottom now he’s here. He spent three years on the front lines of technical support, troubleshooting internet and VoIP issues. He moved forward and up and into the technical writing and marketing content creation space. He’s helped set up hundreds of customer accounts and provide advice to many people with questions or issues with their voice service.