Whether you run a small business or a multinational company, an efficient business phone system is essential. Your system may be focused on internal communications between employees, different departments or even various branches worldwide.
You may also need a system which enables your customers to contact you easily.
But whatever your requirements, you will still need to have a clear understanding of the different kinds of phone systems available, their features and their likely costs, before embarking on the process of installation.
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What are the Different Kinds of Phone Systems?
Unlike domestic users, most businesses need the capability of managing more than one line, and require the greater range of features that a business system can offer.
There are four main types of business phone system: KSU-less systems, key systems, PBX systems and VoIP. It's also possible to install a hybrid system which combines technologies to provide a greater range of features.
PBX (Private Branch Exchange) systems effectively operate as a private hub, with calls being routed automatically, similar to a public phone exchange.
This allows calls to be dialed directly, rather than requiring manual routing, and can offer more in the way of additional features.
They can be more expensive to install and maintain, but are a better way of managing calls in a mid to large-scale company.
With careful planning, it's relatively easy to expand the system, for example by adding more phones, as existing wiring can be used.
It can be expensive to install a PBX system, but the exact figure depends on variables such as the number of lines required, ease of access when installing cabling, and length of cabling required.
The cost of installation for a smaller company is likely to be more pro rata than for a larger organization due to economies of scale.
A central hub can cost between $1,000 and $10,000 in itself, before taking peripherals and installation into account.
As a general guide, average overall costs are around $1,000 per line.
VoIP (Voice Over Internet Protocol) systems use the internet to manage calls, which can be a great advantage if you operate internationally as calls made to the same system are free even if you are calling abroad.
It also offers flexibility to your employees, particularly if you encourage remote working, because VoIP handsets simply need to be plugged into any LAN connection, and hybrid handsets can utilize either VoIP or standard calling.
Features such as video conferencing are easy to access. However, you will need a fast and reliable internet connection to make the best use of VoIP.
VoIP systems require specialized equipment, such as VoIP handsets and data cabling. Prices for each element vary widely, reflecting the differences in features.
As a rough guide, costs are likely to range between $100 and $250 per employee. However, if this is your first installation, you will also need to purchase a VoIP router, which can cost between $100 and $1,500.
These types of systems can be perfect for small businesses.
To learn more read our full guides to:
Hosted or Internal Systems
If you opt for a PBX or VoIP system, you have the option of installing your own internal system, or arranging a hosted solution.
A hosted service is where the technology is managed remotely by the supplier, leaving the full range of features at your fingertips, without the cost and inconvenience of installing your own equipment. There are many companies offering hosted services.
A mobile PBX system allows a cellphone to be run as an extension to an existing PBX system, with the full range of functionality.
This provides greater flexibility than simply forwarding calls to the cellphone.
A key system allows users to see and control calls manually, perhaps through a switchboard, and is managed in-house.
Key systems are best suited to companies with between 10 and 50 employees as they have a limited range of features, and manually handling calls to more than 50 employees becomes inefficient. A Key system costs between $350 and $1,000 per employee.
These systems need no base hub to manage calls, as all the routing software is housed within the phone itself. They are only suitable for businesses with fewer than 10 employees, and are not compatible with other phone systems, making future upgrading more expensive.
Features of a Business Phone System
There is a vast range of features which can be included in a business phone system, depending on the type of system you choose.
Naturally your requirements will depend on the size and nature of your business, and whether you require customer focused features as well as internal ones. Some features come as standard, but others will incur additional costs.
Some of the most popular business phone system features are:
Auto Attendant - automatically processes calls round the clock.
Automatic Ringback - if the line is busy, the caller is rung automatically when it becomes free.
Call Logging - records calls for future reference or training purposes.
Call Blocking - prevents unwanted or nuisance calls.
Call Forwarding - calls can be sent to another extension or a cellphone.
Call Holding - allows call to be suspended without losing the connection (e.g. to consult with a manager without the caller hearing).
Call Pick Up - anyone can answer a call from another line on their own line.
Call Transfer - calls can be transferred to another extension without customer needing to redial.
Call Waiting - lets the user know when a call is made if the line is already in use.
Caller ID - displays the number of the caller before call is answered.
Conference Call - allows several users to communicate simultaneously.
Desktop Integration - customer details are displayed on the computer automatically when a call is answered.
Line Hunting - the system will automatically route a call to another designated phone if the line is busy or there is no answer.
Music on Hold - plays music to the caller if the line is busy.
Speed Dialing - store numbers for automatic dialing.
Video Conferencing - several callers can communicate via video link.
Voicemail - the caller can leave a message.
Which is the Best System to Choose?
Every business is unique, so you will need to discuss your requirements with professional installers who can explain your options to you. A small office will need a very different system than a call center.
Smaller businesses often find that an out-of-the-box system can work very well. Many companies offer such packages, and it's relatively easy to predict your costs, as you know exactly what's included in the deal. Installation costs will vary, depending on factors such as the length of cabling required and ease of access.
Larger companies are likely to find that a custom solution suits them best as it's possible to tailor the installation to meet the exact needs of the business.
Once you have considered what system and features you need, compare prices between providers to get the best deal.
Don't forget to check the fine print, to see what the terms and conditions are regarding call out times if your system goes down, technical support both during and after installation, and whether items such as replacement parts are included.
One way to minimize costs is to consider a hosted solution. You will not need to pay for any installation, and set up time could be considerably reduced because all the operating hardware stays with your provider.
There are many hosted packages available, catering for every kind of operation. As a general guide, operating costs are likely to be:
Unlimited Local Package - Offers unlimited local calls with some additional features: around $25 per line.
Unlimited National Package - Unlimited national calls with up to 15 features: around $60 per line.
Future Proofing your Investment
Every business needs the capacity to grow and develop, so when considering your current telephone needs, remember to think about how your business might look in five years time.
Your investment may be wasted if you don't consider your future needs, and you don't install a system that's capable of expanding and developing.
Choosing a Provider
With so much involved, and so much at stake, getting professional advice is essential if you want to be sure that you end up with a system that meets your needs now and will serve you well in the future.
However, make sure that you compare providers before committing yourself to any long term deal. For example look at our office phone system section.
Note whether they genuinely listen to your view, and understand your requirements clearly, or whether they are simply anxious to sell you a package.
Check whether they can offer products from several companies, or can only deal with one.
Check the fine print carefully to see what you are committing to, and what services you can expect from them.
You don't want to end up with a system that's not right for you, with no way to walk away without considerable expense.
At the end of the day, obtaining the best phone system for your business depends on careful analysis of your needs and requirements, and taking time to consider which provider and package can offer you the best solution.
List of Providers:
To find installers in your area see our list of phone system suppliers by state.