Types of Small Business Phone Systems (And Which to Choose!)

If you’re looking to change your business phone system, you know the importance of choosing the right one–a phone call is often the only bridge connecting you from your clients, after all. You also know the dizzying number of options there are to choose from, each with different features and prices. To help you along in the process, we’ve broken down the three main types of business phone systems. Happy hunting!

Landline phones

Landline phones are the oldest type of business phone system still used widely. While they are a time-honored solution, they have many drawbacks; as mobile technology improves and becomes more affordable, companies have shifted they way they work in response.

Landlines, or copper wire phone systems, offer limited functionality compared to their modern counterparts. While this obviously limits communication potential, it also makes landlines more reliable and less susceptible to failure.

Additionally, landline phones are rarely inexpensive. The hardware, infrastructure and required maintenance lead to particularly high setup costs, the last thing a small business needs in an ever-changing business environment.

Is this the system for you?

Truthfully, the only instance in which a landline phone system is practical for a small business is if you already own one and don’t want (or can’t afford) to upgrade.

PBX Phones

Think of Private Branch Exchange (PBX) phone systems as the landline phone’s more functional counterpart. PBX systems come in two forms: on-premise and hosted.

On-Premise PBX

For larger businesses, on-premise PBX systems are an ideal solution: all of the phone system’s hardware is stored wherever your business is, as the name implies. PBX systems tout features like call holding and forwarding, which are unavailable on a landline. This means significantly higher upfront costs, however, as the servers and other hardware required can be expensive. Maintenance of on-premise systems falls squarely on the shoulders of the company. This means ensuring your team is equipped to keep your system running, which can be costly.

Hosted PBX

In contrast to on-premise systems, hosted PBX systems centralize all infrastructure at the service provider’s location, so users simply connect their desk phones via the Internet. Though hosted systems can be easier to implement and use, monthly costs can be higher than those of on-premise systems.

Is this the system for you?

If you have the money for a pricier system and prefer to have phone hardware to use exclusively for business purposes, you might stand to benefit from investing in a PBX system.

Virtual Phone Systems

With all of this in mind comes the third type of business phone, the solution modern businesses both large and small are quickly adopting: the virtual phone system. Essentially, virtual phone systems put the functionality of a traditional business phone system in a smartphone app. All the features are there, from a separate phone number just for your business to call forwarding and recording, voicemail, analytics, and more.

The main difference here is, of course, that the only hardware you’ll need is the smartphone you probably already own, which brings costs down significantly. Pricing is usually structured as a monthly fee per user, with no initials setup fees and no maintenance costs, since systems are hosted in the cloud.

Is this the system for you?

If you’re using your personal cell phone as your business phone and would prefer some separation between the two, virtual phone systems are for you. They’re inexpensive, easy to set up, packed with features, and designed to scale with your business.

Photo via Shutterstock

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