The Ultimate Guide to Small Business Phone Systems

What are business phone systems?

A business phone system is an advanced calling network designed to improve communications for small and large organizations—and everything in between. Because business phones are designed to handle the complex needs of businesses, like customer service calls and call routing to get calls to the right person, office telephone systems have capabilities beyond what you would find on a typical residential telephone service.

Some of the most useful capabilities of a business telephone system include the following:

  1. Multiple lines, allowing your business to speak with several customers at once
  2. Voicemail, that stores messages and makes retrieval possible, even when you’re away from the office
  3. Automated features like auto attendant that can answer the phone for you and direct callers to the appropriate extension
  4. Conference calling that allows for more than two people to be on the same call—a great benefit for meetings, especially with remote workers
  5. On-hold music or messages to let callers know that they’re still on an active line  

There are a few different types of telephone systems suitable for small office or business use: multi-line, VoIP, PBX, and Cloud-based phone systems. These office phone systems are differentiated primarily by the technology used and the cost and the service provider. Most of the communications functions of one type of system can be replicated on the other systems, but the cost to do so can vary drastically.


Chapter 1: Multi-line Phone Systems

Multi-line phone systems are phones that can have several lines run through the same unit, allowing the operator to answer each phone number individually or send calls to voicemail. These business phone systems are fairly basic, making them a great fit for many small businesses. Simple 2-line phone systems have separate telephone units, allowing multiple people to be on a call—say, a receptionist and a manager—at the same time. More complex 4-line phone systems allow for even more employees to take or make calls simultaneously. With either phone system, you can handle a local line or toll-free number.

small business phone system

When shopping for a new multi-line phone system, the biggest thing to look out for is how many lines it supports and compare that to how many users you have on your system. You don’t want to pay for more than you need, but you also want a business phone service that allows you some room to grow.

The multi-line telephone is your basic small business telephone system. It is the sturdy, reliable office phone system that you find in every professional office. It’s the reliable device to unify communication and stay in touch with customers.

In this guide, we’ll cover everything you need to know about multi-line and small business phone systems, including features to look for, how much you can expect to pay and what brands are best.

Learn about Multi-Line Phone Systems


Chapter 2: VoIP Phone Systems

VoIP phone systems operate using broadband internet connections rather than traditional phone lines. This allows several unique advantages over standard business phone systems, including ease of installation, scalability, pricing, and advanced features, such as setting up a virtual receptionist to handle calls and forwarding calls to employee cell phones using a mobile app.

cheap business phone system

With a VoIP business phone system, you can have unique phone numbers just like a traditional phone system, you can handle toll free numbers, and you can route calls to extensions for specific employees.

VoIP stands for “voice over internet protocol”. Other related acronyms you’ll see include IP PBX and IP office. IP PBX is an internet protocol, or VoIP, system with many phone lines. It allows you to take many different calls at the same time without hosting any infrastructure onsite. IP office is voip provider Avaya’s primary product line for VoIP service.

When shopping for small business VoIP systems, one thing you’ll want to look for is integration with other systems your company uses. One of the unique advantages of VoIP service is that it can connect with systems like CRM (customer relationship manager) software, allowing automatic logging of interactions and other perks. A potential downside to this type of setup is its reliability—you’ll need to ensure you have high-speed internet access for this type of system to function properly.

Our guide to VoIP phone systems will cover what features are available, the advantages and disadvantages of the platform, and what types of businesses or offices can benefit from these setups.

Learn about VoIP Phone Systems


Chapter 3: PBX Phone Systems

PBX stands for private branch exchange, and it is essentially a private phone network for the office. It routes incoming and outgoing voice calls through the business’s phone lines and offers a variety of advanced features like call holding, routing to extensions, and conference calling, which are essential for doing business.

cables for small business phone system

A PBX phone system is different from a standard multi-line phone system in that the call switching and routing does not occur directly through the phone unit, but rather is centralized. This makes a PBX more easily scalable and often more cost-effective than a key system. A PBX system can also be hosted in the Cloud (called a host PBX or virtual PBX) and handle VoIP calls (called IP-PBX). These systems are very flexible.

Our guide will cover the basics of PBX phone systems and the advantages of traditional PBX compared to hosted PBX and IP-PBX.

Learn about PBX Phone Systems


Chapter 4: Cloud Phone Systems

A Cloud phone system takes your infrastructure off-site, handling call routing and signal processing remotely for a low monthly fee—saving you money and time on system upkeep and growth. A Cloud phone system can be a hosted PBX system, or it can be a VoIP system.

phone system for business

There are several advantages to hosting your small business phone system in the cloud:

  • The system is completely off-site, saving space in your office and costs to house equipment on premise.
  • It is hosted on a third-party server, so your company won’t have to worry about maintenance—the hosting company typically handles that.
  • It’s more easily scalable; your virtual office can grow as needed.
  • It’s often more cost-effective.

The disadvantage, of course, is that you’re relying on the hosting company to maintain uptime and keep things running smoothly, whereas with an on-site system your IT department can handle any issues that crop up.

Our guide to cloud-based phone systems will go over these pros and cons in detail and recommend which types of businesses can benefit from taking their business phone system into the Cloud.

Learn about Cloud Phone Systems


When you’re evaluating different service providers, there are a few different factors to take into consideration. Service availability is the first one. The service provider needs to be in your area. Naturally, price is another very important one, and many times there are additional fees to assess. An activation fee often comes with new service. And a third often over-looked factor is the contract length. Is it a year contract? A two year contract? Make sure you know what you’re committing to.

All of these factors, and many more, will be assessed in the coming chapters. For help finding phone service and pricing in your area, simply fill out this form.