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Choosing a Business Phone System: A Buyer's Guide  November 7, 2023 – 05:37 am
Choosing a Business Phone System: A Buyer's GuideCredit: Lane V. Erickson/Shutterstock

If you're looking for a new business phone system, there are several questions you need to answer first.

1. Do you need a full phone system that includes physical office telephones, or could your business get by with a virtual phone service that relies solely on mobile devices instead of traditional office phones?

2. If you do need office telephones, what kind of service do you want? You need to choose between a traditional landline telephone service, which is provided by a local or regional phone company, and a Voice over Internet Protocol (VoIP) system, which runs over the internet and is offered by a multitude of providers.

3. If you choose a VoIP, do you want to house the system at your business (on-premises) or have it hosted by your service provider (cloud-based)?

We will help you answer those questions, but if you already know what you need and just want to see our recommendations for the best business phone systems, visit our best picks page.

Editor’s Note: Looking for information on business phone systems? Use the questionnaire below and our vendor partners will contact you to provide you with the information you need:

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If you're not sure yet, read on. We'll fill you in on the pros and cons of each of the following types of phone systems:

  • Virtual phone systems
  • Landlines
  • Cloud and on-premises VoIP systems

Virtual Phone Systems

  • Virtual phone systems work by connecting a business phone line to remote workers on their mobile or home phones.
  • These types of systems work as an extensive call-forwarding solution, wherein calls are transferred to each employee's designated phone (cell or home) when a customer or client calls the main business number.
  • These systems include a variety of features, such as automated receptionists, voicemail, call forwarding, call screening and online faxing.

Pros and cons: This type of service allows businesses with employees working from locations other than the company's office to present a professional face at all times. It also gives remote workers access to a variety of phone system features that mobile and home phones don't offer. The downside is that virtual systems aren't a full-fledged phone system. Your calls are still processed on your mobile or home phone network. This means you are charged for the call on the virtual system and use up your mobile- or home-phone minutes.

Best for: Businesses with a large group of remote workers, or sole-proprietor businesses.

Traditional Landline Systems

  • Landlines in this instance are traditional phone systems, typically supported by a local or regional phone company.
  • Landlines, also known as public switched telephone networks (PSTNs), are analog systems that run via the telephone company's traditional copper wiring.
  • To run a landline service, you need on-premises PBX hardware. This is the hardware that's used to create multiple extensions and allow for phone system features, such as call transferring and call directories.
  • There are landline systems today that are considered a hybrid with VoIP systems. There is a traditional phone line that comes into the business that connects to a business's data network. The data network within the businesses is then used to connect each individual phone.

Chad BrooksPros and cons: Landline systems are a reliable, time-tested solution that many companies are comfortable using. The biggest negative of these systems is that most phone system providers are moving away from landlines, making them more difficult not only to purchase, but to repair should something break.

Best for: Large corporations that have the budget to pay for them and an in-house IT staff to run and maintain them. Also necessary for businesses without high-speed internet access.

VoIP Phone Systems

  • Instead of the copper wires that landlines employ, VoIP phone systems use the same internet connection that a company is already using to get online.
  • VoIP systems provide features that previously only large corporations using expensive PBX hardware had access to, such as automated attendants, call queues and computer integration that allows voicemails to be sent to email inboxes and computers to be turned into "softphones."
  • VoIP systems give remote workers access to a business's phone system from their mobile device.

Pros and cons: VoIP systems provide a sophisticated phone system complete with all the bells and whistles. These systems are easily set up and configured, and are significantly cheaper than landline systems. The downside, however, is that these systems rely on your internet connection. So, if you're in a community with spotty internet service, this type of phone system wouldn't work for you. [See Related Story: VoIP for Business: Why It Makes Sense]

Best for: Small businesses that want the functionality of a sophisticated phone system at a reasonable price, and businesses that want their remote employees to have access to the phone system.

If you decide that a VoIP system will fit your needs, you now have another decision to make. While landline systems force you to house all the necessary equipment inside your business, VoIP systems give you the option to buy your equipment outright and self-host, or to rent the equipment from your service provider and have the provider house it in the cloud.


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