16 Ways a Virtual Phone Service Can Help Your Business

virtual phone service

When launching your small business, it’s unlikely that you thought hard about setting up a phone system, if you thought about it at all.

You’re not alone in this: out of the 25-plus startup checklists we looked at online while researching this article, only one listed phone systems and it was pretty far down in terms of priority.

Win $100 for Vendor Insights

Sell Your Business

Drive Traffic to Your Website

This isn’t terribly surprising. More than three-quarters of small businesses started in 2013 had four or less people. With such a small team, using individual mobile phones just makes sense.

However, as those businesses grow, both in terms of employees and clients, the need for a more sophisticated, yet affordable, phone system becomes apparent. After all, you’d hate to miss even one call, right?

And that’s where the virtual phone system enters the picture.

What is a Virtual Phone Service?

For decades, business phone systems have offered more than a phone on every desk. From voicemail to call routing, call forwarding and conference calling, modern phone systems have transformed the way businesses communicate with their customers, partners and within their own walls.

For many small businesses however, the price of an in-house phone system was prohibitive. Aside from the equipment itself (including phones), the cost of managing, troubleshooting and maintaining a system was high.

In the late 1990s however, a new solution presented itself: virtual phone services. Much like the online applications that you use in the cloud, these services enabled small businesses to get more features for less money by shouldering all the hardware, management and maintenance costs and spreading them across a number of businesses. In addition, businesses that use virtual phone services can use their existing phone devices, whether wired to the wall or mobile.

The result? Small businesses now had access to robust business phone services at a much lower price.

16 Ways a Virtual Phone Service Can Help Your Business

Since they were introduced, virtual phone services have continually grown their service offerings. To help you grasp the breadth of what’s available, check out the most common, as well as some uncommon, features below.

Common Features of a Virtual Phone Service

Here’s a sample of the most common features offered by virtual phone services:

  1. Phone numbers – Advertise one main number or create as many local direct-dial and vanity 800 numbers as you need (warning: more numbers can mean a higher cost). You can typically set the caller ID you’d like to use so the person whom you’re calling will see your company’s name.
  2. Virtual receptionists and self-serve menus – Greet callers with a professional greeting and then send them on their way or offer a menu with options including an extension directory as well as location and business hours.
  3. Hold music – You can even pick your own!
  4. Call routing – Help your caller reach the right person with automation rules that you can change on the fly. Determine who gets the call using features such as group queues and simultaneous ringing and get your calls on the road with “follow-me” features that forward all calls to your mobile device. You can even set up screening rules so important calls are sent to you while less important calls are sent to voicemail.
  5. Other phone features – Most virtual phone services offer call transfer, call parking, caller ID, call waiting and do not disturb. Some even announce the caller (i.e. they ask the caller to say their name, record that and then play it for you before you accept the call) and call blocking.
  6. Click to call – Let your customers call you by clicking on a website button.
  7. Conference calling – It’s like an online party where you get work done.
  8. Faxes – Receive faxes and have them delivered via email.
  9. Voicemail – Think bigger than the simple ability to receive a voicemail. Many virtual phone services will forward a recording of your voicemails to your email address where you can play them immediately.
  10. Account management – Change, manage and monitor your phone system with an easy-to-use online dashboard. No complex systems to manage and no hardware to deal with.

Uncommon Features of a Virtual Phone Service

  1. Live attendant – Nothing’s better than having a live person answer your business phone. Some virtual phone services enable you to offer that experience without having to hire a receptionist.
  2. Voicemail transcriptions – Having a recording of each voicemail delivered to you via email is nice however, you can’t listen to one during a meeting. That’s when a transcribed voicemail, your message in text, really comes in handy.
  3. Call flip – Need to leave the office when you’re in the middle of a call? Call flip enables you to transfer the call to your mobile device so you can keep talking on the go.
  4. Web and video conferencing – Some virtual phone services offer the ability to host web and videoconferences as needed.
  5. Integration – Integrating your virtual phone service with often used applications lets you you set up efficient processes. For example, with RingCentral, you can send inbound faxes to specific Box folders and enable “click-to-call” from within the Zendesk customer service solution.
  6. Call recording – If you need to record a call, for either legal or training purposes, some virtual phone services offer that feature.

The Voice-Over-IP (VOIP) Decision

Virtual phone services can be offered in one of two ways:

  1. Traditional phone service utilizing a PBX (private branch exchange) that uses the same lines that your home and cell phones use; or
  2. VOIP, a method that routes your calls over the Internet.

While VOIP is often less expensive, there are two important facts to consider before choosing a virtual phone service that utilizes that approach:

  1. Reliability – VOIP requires a steady and strong Internet connection. If that’s not available, you’ll be looking at garbled and dropped calls.
  2. Emergency services – Emergency services are fully integrated with traditional phone services that utilize a PBX but not with VOIP services. That means that services like 911 cannot trace VOIP calls, a severe restriction if you’re ever in trouble. While this issue is being addressed, it’s still a real concern.

List of Virtual Phone Services

To help you find a virtual phone service that fits your requirements and budget, we’ve compiled the list below to get you started.

Note: features and prices vary widely between services so be sure to do your research.


At some point, many small business owners will find themselves considering a virtual phone service.

It’s not always the size of the business that drives the search for a solution, but the convenience and “look-like-a-bigger-business” ability that these solutions provide.

Before you begin looking, familiarize yourself with the features listed above and then use the list of virtual phone services to get your search underway.

Businesswoman on Phone Photo via Shutterstock

Matt Mansfield Matt Mansfield is the Tech Editor and SEO Manager at Small Business Trends where he is responsible for directing and writing many of the site’s product reviews, technology how-to’s, and lists of small business resources as well as increasing the reach of our content.

4 Reactions
  1. Matt: I still remember Grasshoper’s campaign with chocolate covered grasshopers… 😉 And now I hear them on podcasts as the phone service for entrepreneurs.

  2. Matt, great article to introduce VoIP services to the public. I wanted to introduce our company (www.telonium.com) to the list as well. Telonium is a full-featured hosted phone system solution to small businesses. Thanks!

  3. Actually, there is a company called LiveOperators247 that does the same thing and offering great service. I think it need to be added in this list.

  4. I love what you said about investing in a phone system that plays hold music. Phone systems are necessary for any business. If I were to need such services, I would find the best phone company around.

Win $100 for Vendor Selection Insights

Tell us!
No, Thank You