In an effort to cut expensive monthly phone bills, many small businesses are turning to VoIP (Voice Over Internet Protocol) services, which offer many of the same features as a traditional landline without the markups.
The biggest incentive for a small business to switch to VoIP services is the opportunity to save on long-distance bills, whether you're making frequent calls to customers across the country or communicating with employees who travel frequently or who live out of the area.
For a small business, there are endless options for VoIP providers. You can start by calling your ISP to find out what services might be available, but its smart to do your due diligence by researching the myriad of possibilities. Or have a company like Resource Nation match you up with VoIP phone service providers to compare quotes and get companies competing for your business. Each provider offers different services -- so it might be helpful to make a list of must-haves (call-waiting, conferencing, faxing, etc.) before settling on one.
How Much Can You Save With VoIP?
Below, we break down the estimated costs associated with a VoIP service versus a traditional landline.
|VoIP||Traditional phone||Savings with VoIP|
|Monthly subscription||Depending on your service provider, subscriptions can range anywhere from $2.95 a month for Skype's unlimited outbound local and long-distance calls in the U.S. and Canada to $79.95 a month for Lingo's Business Premium Plan which offers unlimited calling in the U.S. and 25 other countries. Average cost: $15-$50 a month||Average cost: $50 a month per line for small business||Up to $35 a month on average|
|Long-distance||2 - 4 cents a minute for domestic calls||5.5 - 12 cents per minute for domestic calls||3.5 - 8 cents per minute|
|Startup equipment||Headsets (optional): $7-$400 VoIP-compatible phones: $100-$300 and up Adapters (might be offered for free from VoIP provider): $0 -$300 Total: $107 - $1,000||PBX system(recommended for businesses with more than 40 employees): $800-$1,000 per user Key system(recommended for businesses with 5 to 40 employees): $300-$1,000 per user KSU-less system(recommended for businesses with fewer than 10 employees) $100-$250 per phone Total: $100-$40,000 or more depending on size of business||Up to $9,200|
Pros and Cons of IP Phone Service
- Unlimited local calling and very low-cost, if not free, long-distance calling.
- Call waiting, call forwarding, caller ID, anonymous call blocking, toll-free numbers and local numbers at a low cost (for instance, if you are running a business in one state, you can set up a local number in another state so your business can be listed in local phone directories)
- Free video-calling and video-conferencing, instant messaging, file sharing and more (depending on the service you select)
- The ability to make calls from anywhere in the world with an internet connection using an adapter (depending on the service you select)
- The ability to make VoIP calls with your mobile phone (depending on the service you select)
- Saving lots of money!
- Call quality might not be as good as with a traditional landline.
- If you lose internet and electric, you also lose your phone service.
- Because it's web-based, calls are at risk of being hacked.
- If you make a significant number of calls you can slow down your broadband connection.
If the cost savings are attractive for your business, find more tips and advice for choosing VoIP phone service here on Business.com.