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Updated Apr 10, 2024

Which Business Phone System Is Best for Your Business?

Narrow your options by assessing your needs and budget.

Mark Fairlie
Mark Fairlie, Senior Analyst & Expert on Business Ownership
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Many organizations need a full-featured phone system for business communications. While running a business from a smartphone is possible, this option isn’t always ideal. A business phone system presents your organization professionally and provides numerous advanced features to streamline communications with customers, colleagues, vendors and more.

We’ll explain the crucial factors and features to consider when choosing a business phone system and outline various options to consider. 

Editor’s note: Looking for a phone system for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to receive information from a variety of vendors for free:

How to choose the best phone system for your business

Business communication needs vary widely by industry, business type and company size. For example, say you have a direct-to-consumer business with a substantial support department that takes custom calls regularly. In that case, investing in a reliable VoIP system that integrates with your current business software is worthwhile. If you run a boutique marketing agency, you’ll likely need a business phone system that handles conference call issues for seamless audio and video client meetings. 

Consider the following steps and best practices when choosing a business phone system:

1. Assess what type of business phone system you need.

You’ll likely choose from three categories of business phone systems: landlines, Voice over Internet Protocol (VoIP), and virtual phones.  

Landlines

Landline phones are traditional phone systems; you plug the phone into the wall and work with a local phone company. Landlines rely on physical wire connections monitored and run by regional phone companies. 

While landlines provide a strong connection and reliable service, the telecommunications industry is gradually moving away from this technology in favor of VoIP and virtual systems. 

Landline features

  • Voicemail
  • Call holding
  • Call blocking

Landline pricing

  • About $60 per phone line per month

Landline pros

  • Works with older, less expensive hardware
  • Reliable service, even in areas with a poor internet signal

Landline cons

  • You may need to purchase a private branch exchange (PBX) or PBX hardware. 
  • The industry is phasing out this technology; fewer features and upgrades are available. 

VoIP

VoIP technology pairs your phone system with your internet connection. The best business internet service providers can support your VoIP phone system for seamless communications. 

With VoIP systems, you must decide between an on-premises VoIP system that you host or a cloud-hosted VoIP system.

  • On-premises VoIP systems: An on-premises VoIP system requires purchasing or renting expensive software and paying a monthly fee. You and your business are also responsible for maintaining the system. This setup makes sense for businesses that want to be responsible for their service in case of an outage.
  • Cloud-based VoIP systems: A cloud-based VoIP system requires no maintenance or hardware. All technical services are handled directly by the service provider. Subscription costs usually depend on user numbers. Cloud-based phone systems are often significantly cheaper overall than on-premises VoIP systems. Over time, however, subscription fees add up; there may come a point when an on-premises option makes sense.
FYIDid you know
There are numerous VoIP phone system benefits compared to landline services, even when connected to a PBX. This technology has come a long way and now rivals landlines in quality and reliability.

VoIP features

  • Automated voicemail boxes
  • Conference calling
  • Real-time call center monitoring

VoIP pricing

  • From $15 per user per month

VoIP pros

  • Cost-effective and easily scalable
  • Highly mobile

VoIP cons

  • Potential poor call quality
  • Potential security concerns 

Virtual phone systems

A virtual phone system can be an excellent option for businesses with many employees in different locations. Virtual systems are not full-fledged phone systems; they provide various features for your business while operating on your mobile or home phone network.

Virtual phone system features

  • Auto attendants with customizable greetings and messages
  • Analytics and reports
  • Voicemail transcription

Virtual phone system pricing

  • From $15 per user per month

Virtual phone system pros

  • Flexible device options, including computers, mobile phones and conference phones
  • Easy to configure and use with a high-speed internet connection

Virtual phone system cons

  • May experience latency and jitter with a poor internet connection
  • No advanced features, like file sharing, messaging and video conferencing
Bottom LineBottom line
Assess your needs to ensure you choose the right business phone system type to support your company's daily operations.

2. List the features your business phone system should have. 

How do you envision your business phone system working? Features vary by provider and phone system type, so if a particular feature is crucial for your organization, your choice will be narrowed down. 

Most phone systems come with a basic feature set and charge for additional features through a higher-tiered plan or add-on charges. These are some features to look for:

  • Automated attendant
  • Auto-dialing
  • Call monitoring
  • Call queues
  • Call recording
  • Call redirection
  • Call reports
  • Call routing/forwarding
  • Call transfer
  • Conference calling
  • Directory assistance
  • Extension dialing
  • Integrations with programs like Outlook and Salesforce
  • Interactive voice response
  • Internet fax 
  • Interoffice instant messaging
  • Missed call notifications
  • Ring groups
  • Toll-free or local business phone number
  • Video chat
  • Virtual receptionist
  • Voicemail and visual voicemail
  • Voicemail transcription
  • Voicemail-to-email
  • Voicemail-to-text

3. Determine how many people need a business phone.

Consider who will need a traditional phone in your office. Not everyone will want or need a phone on their desk or computer. Communication tools like Slack can quickly facilitate voice and video calls and may be sufficient for employees who don’t frequently communicate with customers or vendors.

If you have a remote company or a hybrid office with a remote work plan, you must also consider how many remote employees must access your business phone system. If many remote employees will need access, a VoIP system may be your best option, as these systems provide the flexibility a remote or hybrid workplace needs. 

TipBottom line
Consider scalability when selecting a business phone system. You may need only a few lines now, but a multiline phone system may be necessary as you grow.

3. Inventory your existing hardware.

If you’ve already invested in telephone hardware and aren’t ready to consider a sunk cost, you may be happy to learn that some older phones are compatible with VoIP systems. 

You may also be able to use a phone adapter to increase the likelihood of repurposing older hardware for modern technology and keep your existing business phone numbers.

4. Check for bundled service options.

Most internet service providers offer bundled discounts for voice and VoIP phone services and business internet. It’s worth it to at least consider these options. 

While all telecom providers advertise current deals online, we recommend calling your internet service provider (ISP) to ask about promotions or special pricing if you opted for a bundled package with additional services. If you can find a better deal elsewhere, let your existing ISP know; it may be willing to match or beat a competitive offer to keep you as a customer.

FYIDid you know
Check out BroadbandNow and InMyArea.com to learn about potential business internet service providers in your area.

5. Narrow your list to potential business phone system providers.

At this point, you’ve determined the best type of telephone service for your business, the features you need and how many users you’ll have. You’ve inventoried your existing hardware and checked with your ISP about its potential options. 

Now, it’s time to create a shortlist of business phone system providers who can meet your needs. When doing so, you must weigh the following crucial factors that may sway your decision:

  • Reliability: Regardless of business phone system type, ensure you choose a reliable service. Consider uptime, the number of data centers and redundancy systems in place, how many call carriers the provider works with, and how it ensures you don’t lose service (or, in an emergency, get service back quickly). Reliability is a crucial aspect of any phone service provider. 
  • Security: If your business needs maximum or customized security, a premises-based VoIP or landline system would be an excellent option. If you want a cloud-based network, ensure the provider offers data encryption during transmission and physically secure data centers.
  • Mobility: Mobility is inherent if you opt for a virtual system with virtual phone numbers. However, if you want a VoIP system, ask your provider about its mobile options. Some providers have mobile apps that let you make calls on your smartphone through the service. This technology allows you to use “softphones.” (More on softphones below.)
  • Support: If you don’t have an IT staff, 24/7 support from your business phone system provider is a must. Consider how many contact methods are offered (e.g., phone, email, live chat), and ask about response times. Check user reviews to learn about typical complaints.

How much do business phone systems cost?

Business phone system costs vary widely by type and features. In addition to the service itself, you may also need to purchase phones. Some providers include basic phones with the service. If not, desktop phones cost anywhere from $90 to $400 each, while conference phones range from $250 to $1,500.

Here’s a quick cost breakdown by phone system type:

  • Landline costs: Traditional landline systems cost around $60 to $80 per line per month. AT&T Phone for Business offers a plan for $59 per month for unlimited calling in the U.S., Canada, Puerto Rico, and Mexico on a two-year contract. It does not include the cost of the physical phones you will use; however, your existing analog office phones will work.
  • Cloud-based VoIP systems: Cloud-based VoIP systems typically cost $15 to $50 per user per month. These costs vary by the service provider, the number of features you need and, in some cases, the number of users on your account. Ooma’s plans, for example, start as low as $19.95 per month.
  • On-premises VoIP systems: On-premises VoIP systems usually charge a one-time fee of $500 to $1,000 per user, plus an installation fee that can be thousands of dollars. If you’re purchasing on-premises hardware, you may also need to spend anywhere from $300 to more than $10,000 for enterprise-level equipment that supports up to 1,000 users and hundreds of concurrent calls.
  • Virtual phone systems: Virtual phone systems don’t require you to purchase physical phones. These systems cost around $15 to $80 per month, depending on the features you want to include in your plan. Grasshopper is an example of a virtual phone service provider.

Hardphones vs. softphones

Some service providers can turn other devices into “softphones” using plug-ins on app marketplaces like Google Play and Apple’s App Store. Softphones allow you to access all the features of your VoIP or virtual phone system through your smartphone, laptop or desktop computer. 

In contrast, “hardphones” are the physical phones you and your colleagues use in the office. 

When choosing a phone system, consider if you want your team to access features like voicemail on their computers and smart devices. Softphones can increase efficiency and productivity for teams that utilize mobile devices and frequently work off-site and on the road.

The best business phone systems

Choosing a business phone solution for your organization requires careful consideration and thought. Here’s a brief overview of some of the best business phone systems around to help you select the right option for your company. 

NextivaONE

  • Cost: $29.95 per user per month for five to 19 users
  • Video meetings: 25 to 250 participants
  • Internet fax: Included
  • Text and MMS: Unlimited text and multimedia messaging

Read our comprehensive review of NextivaONE to learn about this solution’s business intelligence tools, voice analytics and more.

Dialpad

  • Cost: $23 per user per month
  • Free trial: 14 days
  • Video meetings: 10 participants
  • Text and MMS: Unlimited text and multimedia messaging

Read our in-depth review of Dialpad to learn how its visual voicemail transcription and call handling work.

GoTo Connect

  • Cost: $24 per user per month for 11 to 20 users
  • Free trial: 14 days
  • Video meetings: Four to 150 participants
  • Internet fax: Included
  • Text and MMS: Messaging limits differ by tier
  • International calling: Unlimited 

Read our detailed review of GoTo Connect to learn how its video conferencing and chat messaging tools make it a great solution for remote teams. 

8×8

  • Cost: $28 per user per month
  • Video meetings: 500 participants
  • Internet fax: Included
  • Text and MMS: Unlimited text and multimedia messaging
  • International calling: Unlimited 

Read our in-depth review of 8×8 to learn about this solution’s cross-platform team messaging and helpful integrations.

RingCentral

  • Cost: $30 per user per month for one to 49 users
  • Free trial: 14 days
  • Video meetings: 100 to 200 participants
  • Internet fax: Included
  • Text and MMS: Messaging limits range from 25 to 200 per business

Read our RingCentral review to learn about this platform’s advanced call handling and tools, including one-click calling from a softphone application or web browser.

Ooma

  • Cost: $19.95 per user per month
  • Free trial: 30-day money-back guarantee
  • Video meetings: 25 to 100 participants
  • Internet fax: Included
  • Text and MMS: Unlimited text and multimedia messaging

Read our comprehensive Ooma review to learn about high-level features like a virtual receptionist, enhanced call blocking and caller info match.

Vonage

  • Cost: $17.99 per user per month for five to 19 users
  • Free trial: Credit-based for APIs only
  • Video meetings: 100 participants
  • Text and MMS: Unlimited text and multimedia messaging

Read our Vonage review to learn about this solution’s ample voice, video and messaging features.

Zoom

  • Cost: $10 per user per month
  • Video meetings: 100 to 1000 participants
  • Text and MMS: Messaging limits differ by tier
  • Unlimited international calling: Yes, as an add-on

Read our comprehensive Zoom review to learn how Zoom Phone handles video conferencing, team collaboration and call management.

Jeff Hale contributed to this article.

Mark Fairlie
Mark Fairlie, Senior Analyst & Expert on Business Ownership
Mark Fairlie brings decades of expertise in telecommunications and telemarketing to the forefront as the former business owner of a direct marketing company. Also well-versed in a variety of other B2B topics, such as taxation, investments and cybersecurity, he now advises fellow entrepreneurs on the best business practices. With a background in advertising and sales, Fairlie made his mark as the former co-owner of Meridian Delta, which saw a successful transition of ownership in 2015. Through this journey, Fairlie gained invaluable hands-on experience in everything from founding a business to expanding and selling it. Since then, Fairlie has embarked on new ventures, launching a second marketing company and establishing a thriving sole proprietorship.
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