It may seem extreme, but a business phone system sets the tone for the way your business communicates with the world.The right business phone system will allow you to drastically improve your communication, handle complex routing needs, store voicemails and call data efficiently, and a lot more. 

You might be thinking, "How do I know if I've chosen the right business phone service for my needs?" Well, you're in the right place.

Before we begin, ask yourself these questions to determine your business' needs:

1. What are the limitations, or "pain points" of your current business phone system?

2. What are your company's primary business goals, and how is your business phone system helping you achieve them?

Take a second to determine the answers to these questions, because chances are the answers will be addressed at some point as you continue on. Ultimately, your business phone system should help you coordinate your needs and goals.

Keep reading to find out the four basic types of business phone systems and the following information about them - 

  • Key features
  • Differences in cost and capabilities
  • Benefits of each
  • How they work
  • What you'll need to switch

If there's a particular system you'd like to learn about, click on it below:

VoIP Business Phone System

Multi-line Business Phone System

Cloud-Based Business Phone System

Multi-Line Business Phone Systems

This type of business phone system is a basic starting point for any small business. An example of a multi-line phone system in action would be if the copy editor of a newspaper wanted to reach one of the reporters in the same office. While the copy editor was on the phone with one reporter in the same office, another reporter was on the phone interviewing someone outside of the office. 

Multi-line business phone system allow for this. Essentially, a multi-line phone system would allow you to make calls internally and externally at the same time. 

Models will vary, but this type of business phone system allow you to have multiple units work off the same lines, allowing a receptionist and an executive to be on the line at the same time.

Multi-Line Phone System

(Note - A hosted PBX system (or private branch exchange) is similar, and you can choose to use a hosted PBX system for your multi-line phones if you wish. A hosted PBX system uses an automatic directory to funnel callers where they need to go. This also allows your system to handle many calls at the same time without taking up a phone line initially. PBX systems support extensions. PBX platforms also allow you to hold employee conferences on lines without placing calls to an outside line. You'll read more about hosted PBX systems later.)

External lines allow you to communicate with customers/clients/etc. while internal lines allow you to communicate with your coworkers. 

You will typically need to hire someone to install the multi-phone system as it can become quite technical.

Basic Features to Look for in a Multi-Line Phone System

A reputable provider would include the following basic features in a multi-line phone system:

  • Caller ID
  • Speakerphone
  • Mute and Volume Control
  • Voicemail
  • Personal Directory
  • Speed Dial Directory
  • Internal and External Call Transferring
  • All Page/Intercom
  • Call Waiting
  • Do Not Disturb
  • Message Waiting Indicator
  • "Hold" Functionality

Advanced Features to Consider in a Multi-Line Phone System

These features add onto the cost, but will help streamline and organize communication.

  • Auto attendant - essentially, someone greeting you and routing you to the right person or department.
  • Wireless adaptors - so you can avoid a mess of wires to each phone
  • Conferencing - the ability to connect with clients and employees, even if they're not in the office
  • Integration - many small businesses look for an integration with a CRM or ERP to save time, especially businesses with a high volume of calls and accounts
  • Customer Support - your provider should have a reliable and easy-to-access customer support line you can call should you have a question or concern
  • Texting - the capability to text a customer on their mobile device. An example is if you've ever confirmed an appointment or found out about a text-only promotion via a text.
  • (Note - be sure to obtain consent from the consumer before texting them; it can turn ugly fast.)

Benefits of a Multi-Line Phone System

It's possible you are a "solo-preneur" or your business is very small and uses other methods (such as Slack) to communicate quickly. In that case, a multi-line system might not make sense for you.

If, however, your office is larger and you'll need the ability to add extensions and upgrade easily, a multi-line phone system will work well. If you are a contact center or call center with a high volume of calls, you'll find that a multi-line system will act as a quick phone solution for your office.

Operating a multi-line phone system is a matter of simplifying communication. In addition to allowing more than one user of the phone at the same time, some options for this include the ability to pick up a dial tone from 40 ft. away. In a way, it allows you a bit more mobility while you're in the office. (If you're looking for a system that gives you complete mobility inside or outside of the office, consider VoIP.)

pbx phone system (6)

Many providers will allow you to keep your current phone numbers by "porting" them.

What a Multi-Line Phone System Typically Costs

Multi-line phone systems are often priced per handset. For example, a very basic system might cost $200/handset.

What You'll Need to Switch to a Multi-Line Phone System

You'll need physical phones, a reliable provider and someone who can handle the installation process. Be sure the provider you choose has a robust customer service department in place who can field any of your calls and help you take advantage of the business phone system features. You'll often find smaller companies fit to the task of being present during the onboarding process.

It's true that multi-line phone system tend to be a bit more expensive. So, if you are looking to cut costs, consider voice over IP systems, or VoIP. You're about to read more about why many businesses are making the switch to VoIP.

Back to Top

VoIP Business Phone Systems

As long as you have a reasonably fast and quality internet connection, you can get phone service delivered through your internet connection through VoIP. VoIP stands for voice over internet protocol. It turns your voice into data and transmits it over the internet.

In addition to traditional voice services, a VoIP phone can give you access to advanced applications that can help your staff be more agile and productive. Here is a non-exhaustive list -

VoIP Business Phone System Features

  • Mobile integration
  • Call recording
  • Advanced Call Flows
  • User Portals
  • Long distance conference capabilities
  • Operator Console
  • Voicemail manager
  • Mobile app
  • Video conferencing

Advantages of VoIP

A VoIP Phone System is Cost Effective

Some VoIP providers start off as affordable as $19.99 per device.

This is because the service transmits through the Internet - a commodity your business likely already has in place, helping you to avoid unnecessary or extra overhead costs. You will also likely be able to install a VoIP phone system on your own, saving you the cost of hiring someone to wire or install the business phone system.

VoIP phone system

You're not just saving on the cost of the service - overhead costs like maintenance and space are also less of an issue. Often, VoIP is priced per extension with unlimited calls or minutes. Because VoIP is priced this way, the stress of receiving a bill with erratic or unexpected charges is taken away.

This is even more attractive to industries like real estate or insurance. If your employees are often in and out of the office, the use of a mobile phone is often necessary to communicate with coworkers and clients. If you front that bill for your employees, VoIP can allow for those mobile minutes to be included in your bill. That way, any minutes spent on a mobile device won't cost extra - they will simply be included in the flat rate. Sounds pretty appealing, doesn't it?

A VoIP Phone System Allows for Easy Installment and Maintenance

In some cases, installing a VoIP system may not require traditional cabling beyond the existing internet network. This makes installation quick and easy, in the simplest cases it's a 3-step process:

1. Set up your call flow

2. Submit port requests (some companies will handle steps 1 and 2)

3. You receive pre-programmed phones to plug in, and you're live

In addition, it's also much easier to "add an extension." 

Small businesses may not have the resources for "in-house" IT, but the user-friendly nature of VoIP makes it easy for users to adjust to their own preferences without needing the help of a pro.

Furthermore, VoIP is often more reliable than traditional PBX lines or multi-line phone systems. There are little to no interruptions.

pbx phone system (5)

A VoIP Phone System is Helpful for Telecommuters

As remote work becomes more popular, those who prefer to commute or require a more flexible work situation can choose to access their extension's data from anywhere on their mobile phone instead of their office phone. This means they can view their voicemails, directories, call history or anything else that they might need to access, from anywhere.

In addition, if you employ many remote workers, it gives you a really simply way to cover the cost of their minutes without the hassle of installing a physical device. Many small businesses decide to use VoIP for this capability in particular.

Plus, as we discussed earlier, any minutes your employee spends on their mobile phone remotely won't be added onto your monthly rate. They will simply be included in whatever you are paying per extension.

A VoIP Phone System Is Cloud-Based

Cloud communications simply means the system is hosted off site in a secure data center. The server and phone system are then accessed over the internet. 

As previously stated, cloud-based phone systems tend to be less expensive. Learn more about a cloud-based system later.

A VoIP Phone System Is Scaleable

Many small businesses have begun making the switch to a cloud-based business phone system because the additional features that accompany multi-line phone systems are simply not needed in a small office.

In addition, many small businesses appreciate the ability to add an extension easily. For fast-growing small businesses, a new employee becomes a new user and you will only pay for what you need as your number of users grows. 

What You'll Need to Switch to a VoIP Phone System

All you need is an internet connection. As we discussed earlier, many companies will take care of the porting process so you can keep your existing phone numbers. In some cases, you can keep your desk devices as well. Otherwise, if you prefer to have hard phones, you will need to replace them.

You also have the option to use "soft phones" or internet phones that don't require the use of a device. Think Skype. You can make and receive calls directly through the Internet without a physical phone. Some offices do prefer a physical phone, and rightly so. If that is the case, there are many models to choose from. Below are some links to the most popular models:




It may seem like small business VoIP options are endless. Because of that, when choosing a small business VoIP provider, be sure to prioritize:

Cost (Providers start out around $19.99 per device.)

Robust Features

Customer Service

Quality of carriers

This is especially true for cloud-based systems that are cloud-based. Here's what we mean by cloud based.

Back to Top

Cloud-Based Business Phone System

As previously stated, a cloud-based business phone system simply means that the server is hosted off site in a secure data center. It's almost synonymous with VoIP as it means phone service that is delivered through the internet. To put it simply, it means a group of phones that work together, typically in a business setting, to route calls using an internet connection.

Although there are some providers claiming to offer "free" cloud phone capabilities, you shouldn't expect to benefit from this service. As we discussed earlier, your business phone system is not something you'll want to skimp out on. It can be the most valuable investment you choose to make (or not make) - and a reliable phone service can maximize your benefits or cost you dearly.

Think about the cost of your service dropping a call with an important client, or being unable to access an important voicemail message, or even worse, missing it altogether. Having easy access to your phone's data means having access to your business.

Benefits of a Cloud-Based Phone System

Cost Effective

There are significant cost savings associated with switching to a cloud-based phone system. According to, small businesses that switch to VoIP save on local calls on an average of 40 percent. The cost of international calls is reduced by almost 90 percent. No matter what your volume and usage, it's almost guaranteed that you will pay less each month than you would with a landline service.

pbx phone system (4)


Another benefit associated with switching to "the cloud" is mobility. As we discussed earlier, you don't need to be at your desk to utilize your business phone system. Instead, small business and cloud based phones go hand in hand, anywhere. You can work from home and access the service, or you can take a call while off-site and access the service.

Centralize Data

It's a way to centralize data and minutes so your phone bill doesn't shock you each month. You know exactly what you can expect to see. Geographic flexibility means that whether your employees are scattered across the country or simply across the neighborhood, you are all operating under the same system.

Geographic Redundancy 

Another benefit is Geographic Redundancy. This is a fancy term for what simply means that there are different servers that are a mirror replica of the others in what is known as a decentralized setup. Think about it this way - a man who has a great deal of money and hides it in different places all over the world. If one of his stores gets robbed, he has plenty of backup. In the same way, if one of the servers go down temporarily, there is plenty of backup. Because of this set up, there is a very small chance that your service will ever be disrupted or a call will be dropped.

When shopping for a service provider, ask them what the downtime of their service is to get a sense of how much a disruption can affect service. If they have a "good" geographical redundancy, listen for a number as close to zero as possible.

Similar to VoIP, you won't have to pay for equipment maintenance, installation, mechanical malfunctions, or IT hours to keep your system up and running. All of these issues will be dealt with by your service provider, wherever their site is.

With that in mind, be sure to prioritize the customer service of the provider you are considering. Most cloud companies should have a dedicated customer support team that is easy to get a hold of and can take your questions at any time. A knowledgeable professional, as you probably know, is a lot better to deal with than an automated service that puts you on hold frequently and passes you from one representative to the next.

Cloud-based systems are in many ways the future of business phone systems. As more and more small businesses turn to them, they take advantage of a new kind of flexibility and reliability. Dropped calls and lost voicemails are not something your business should have to think about or deal with - it is 2019, after all.

Before we conclude, we have one more important technology to discuss.

Back to Top


PBX, or public branch exchange, is "the name used to refer to the technology that any given telephone provider uses to route calls."

In the past, it was a piece of hardware that had to be stored on site, wherever the calls were coming out of. Any maintenance or operation had to be done by hand. These machines tended to be on the pricier side - they needed their own storage facility because they were so large, and in the most extreme cases had to be operated manually. Plus, if you wanted to save on the expense of a manual operator, an automatic operator starts at $400. Moving your businesses became a costly, complicated a time consuming process.

Think about the operator in an old movie who would switch wires on a switchboard. That is what PBX used to look like!

pbx phone system (1)

This system was, and is, a necessary evil, however. Businesses with more than 3 employees who rely on outbound communication could not, and can not function without a PBX technology in place. Remember when you had to wait for your mom to get off the phone before you could call your friend? Those kinds of conversations can't happen in a fast paced office.

Fast forward to the 21st century, and things are a bit more simple now. There are automated versions of "operators" known as PABX phone systems that are much more cost-effective and convenient. If you choose PBX, your employees will have extensions instead of an assigned dedicated number. Your business will have a single main number, which can simplify things for your customers. You've surely called a business and heard "For Sales, Press 1. For Customer Service, Press 2. If you know your party's extension, you can enter it at any time." That's PBX. Your PBX server will act as the "brain" of your phone system.

Now, in addition to traditional PBX, there is another kind of PBX service:


An IP PBX is the same as a VoIP system in that it transmits voice signals over the internet, rather than traditional phone lines. It tends to be cost effective, as we have previously discussed. In addition, the server does not have to be on site (Hosted PBX). This can save space and make maintenance simpler. This gives small businesses who do not want to spend a lot on their phone system a reliable and cost-effective option.

If you choose to have your PBX on site, you will need to maintain the SIP trunking system. (SIP trunking is connecting your IP system to the public switched telephone network to allow for calls to non-IP phones.)

This can be complicated, so, many small businesses choose to take advantage of a hosted PBX. They do this for a few reasons-

Lower Costs - you won't need to worry about installation, maintenance and upkeep. If you choose to use a hosted PBX server, all you'll need are IP phones and a reliable broadband connection.

Easier to Scale - you won't have to upgrade the hardware yourself as your business grows or you add extensions. This can be costly and very complicated. Instead, the provider will take care of it for you.

Even though you forfeit control by hosting off-site, you are trading it in for ease of use and a worry-free operation.

If you are deciding between a traditional PBX, an IP PBX and whether or not to host it yourself, keep in mind that a traditional PBX phone system can be expensive and difficult to maintain. If you are in the growth phase of your business and hiring a lot of people, consider the costs and maintenance of something like adding an extension.

A hosted PBX system, and more specifically a hosted IP PBX system, can be a great option for a small business who is looking to scale and save money.

Back to Top


Although there is overlap in the options presented here, we tend to lean towards VoIP as the best option for small businesses. It's easy to scale with, cost effective, allows for mobility and most importantly, the best providers offer robust customer service.

Remember the questions we asked at the beginning?

1. What are the limitations, or "pain points" of your current business phone system?

2. What are your company's primary business goals, and how is your business phone system helping you achieve them?

Now that you have all the information you need for each option, do your research and consider your priorities. If there's one thing you want to make an informed decision about, it is your business phone system.

Our Top Blogs