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What Is VoIP and How Can it Work for Small Businesses?

Do you need enterprise-level business phone capabilities on a small budget? Taking advantage of VoIP systems for small businesses helps you level up your services.

Consumers don’t care about the size of your company, but they do expect a fast and consistent response from any platform when they need support. That’s where Voice over Internet Protocol (VoIP) is a game-changer. By moving your communications to a cloud-based system, you’ll save money, boost productivity, and future-proof your business. However, making the switch is a big decision. Start your research off on the right foot by learning about VoIP and how a VoIP phone setup fits into your small business strategy.

How Does VoIP Work? The Basics of Voice over Internet Protocol

Many small businesses once relied solely on conventional phone systems. A traditional landline connects people using phone lines on a public switched telephone network (PSTN). An array of hard-wired office phones keeps you in touch with clients. But today’s customers use many channels to reach your business.


As the number of platforms grew, consumer’s patience dropped. Your clients want to reach you from any device, at any time. Your older phone system can’t keep up. That’s where IP systems for business have the advantage.

What Is Voice over Internet Protocol?

Voice over IP technology routes calls over the internet instead of using a traditional phone line. A VoIP telephone converts voice information into Internet Protocol packets. This digital data is sent via your business local-area network (LAN) to your internet service provider (ISP) connection.


With cloud-based phone services, you don’t need specialized hardware or wiring. Many VoIP systems allow you to bring your own device (BYOD). Companies may also provide you with IP-enabled phones, called softphones or VoIP handsets. This simple setup is called hosted VoIP. It’s an excellent option for small businesses, because you don’t have to maintain, repair, or update an on-premise system.


Depending on your existing equipment, you may choose analog phone adapters (ATA) to use your office phones and fax machines as well. The bottom line is that Voice over Internet Protocol gives you the freedom to set up and scale your business from any location.

VoIP Systems Continue to Improve

Early implementations of VoIP systems were plagued with connectivity and call quality problems, mainly because bandwidth was limited. The main disadvantages of VoIP included dropped calls and more downtime. As internet infrastructure improved, so has Voice over IP quality. Whereas traditional phones rely on aging copper wires and struggle to keep up with advancements, VoIP tech adapts to changing environments. The ease of use and low cost are why the “international VoIP calls market is predicted to hold the significant share of all conversations by 2025,” according to Global Market Insights. As small business owners get used to cloud applications, it makes even more sense to manage communications using their internet connection.

What is a PBX System?

A Public Branch Exchange (PBX) system gives you control over your network. A PBX system is a private telephone network that connects people both internally and externally. Legacy PBX systems connect to a manual control board and computer server. Typical elements of a PBX system include:


  • Call Recording
  • Voicemail
  • Call Queues

However, VoIP installation is also available for PBX systems. You can choose a hosted VoIP phone system or stick with your on-premise layout.

PBX Versus VoIP Systems: Should You Switch?

Your PBX system takes up space and requires regular maintenance. Over time, your IT team may spend more time fixing your network instead of monitoring for security issues or enhancing it for improved communications. While it’s tricky to move from a legacy system to a digital PBX, the right providers will support your team every step of the way. You’ll get help with converting your standard phone network into a VoIP phone system. VoIP systems for small business needs less infrastructure, and your provider handles updates, security issues, and maintenance.

Advantages & Disadvantages of VoIP

Benefits of VoIP for Small Companies

Small businesses gain a competitive edge using VoIP systems. Previously, only large corporations had access to customer-friendly features. With Voice over IP technology, even small business owners present themselves as global competitors. The advantages of VoIP include:


  • VoIP Phone Systems Include Many Features
  • VoIP Setup Offers Flexibility for Growth
  • VoIP Systems for Small Business are Budget-Friendly
  • An Advantage of VoIP is Access to Data
  • IP Systems for Business Improves Customer Experience

VoIP Phone Systems Include Many Features

With Voice over IP services, you won’t give up standard offerings like call waiting or call routing. But, you’ll gain access to a variety of new features designed to help small business owners do more with less. For example, some plans provide options for:


  • Voicemail-to-email
  • Receiving and responding to text messages
  • Conference calls and video calls
  • Call monitoring and recording

VoIP Business Phone Offers Flexibility for Growth

Changing locations or opening a new store used to be a hassle. With VoIP, your voice service goes anyplace you go. If you add remote workers or send your team on the road, then your Voice over IP lets you access customer data from anywhere and on any device. With flexible communications, it’s easy to keep up with changes. Plus, you can update services without expensive infrastructure upgrades.

Is VoIP Less Expensive than A Normal Business Line?

Whether you start small using your current devices or equip an entire contact center, VoIP is priced for small business use. Voice over IP services cost significantly less than standard landlines and come with more features. You’ll pay less due to:


  • Very low startup and installation costs
  • Little to no maintenance expenses
  • Reduced pricing for local or national calls
  • Packages for global calling

An Advantage of VoIP is Access to Data

Information drives the best-made decisions. Standard phone lines can’t offer the same capabilities of VoIP on a small business budget. However, Voice over Internet Protocol services delivers unified communications. Your team can access customer and call data from any device and from anywhere in the world. With data at your fingertips, you can act on problems immediately. For instance, call information helps you increase staffing during high-volume hours and encourages cross-team collaboration to recognize a troubling situation. VoIP makes it easier to prioritize leads for your sales teams and reduces wait times on customer service lines.

IP Systems for Business Improves Customer Experience

How your clients perceive your company plays a huge role in customer acquisition and retention. VoIP technology helps your company portray itself as a large enterprise. Fast response times, multi-channel communications, and enhanced capabilities build trust in your brand. Increasing your credibility results in better customer reviews and more sales. For a people-first approach, VoIP supplies the technology to stay on top of every client interaction.

VoIP Phone Systems: Frequently Asked Questions

Although Voice over IP technology has been around for a long time, small business owners have many questions about real-life scenarios. The VoIP market includes many fly-by-the-night providers, and not all offer the same level of service. That’s why research is vital for any decision about your VoIP phone system and services. Top questions asked by business owners include:

Are Voice over IP networks reliable?

Voice over IP reliability depends on two aspects: your available bandwidth and your provider. You need to make sure you have the appropriate bandwidth available for voice, videoconferencing, and web applications to run smoothly. With the right connection, IP systems for businesses offer the same or better call quality than standard phone systems. However, not all network providers deliver the same consistency. Before choosing a provider, it’s crucial to ask about their system downtime. Many VoIP suppliers list this as a percentage of uptime. Although cheaper Voice over IP options exist, a company with solid reviews and a trusted reputation protect your business from a communications disaster.

Will I save money with a VoIP telephone system?

Yes, VoIP is cheaper than a standard business line because it uses your existing network and internet connection. You won’t need extra hardware or new infrastructure required for a PBX system. When it comes to equipment, you’ll find plenty of budget-friendly options. Many providers offer free or low-cost adaptors and softphones. Others allow you to buy or lease equipment. With services that are BYOD, you can get started with VoIP using any devices connected to your internet service. Plus, you’ll pay less over the long run for maintenance and upgrades. If you want to add more lines or change business locations, then your provider can update your service within minutes and without infrastructure changes.

Are there risks to switching a VoIP phone setup?

With the right VoIP provider, the risks are minimal. Transitioning your team and adjusting to new software may require a slight learning curve. However, your Voice over IP provider should offer support services to get you up and running. A few considerations include:


  • Do you have enough bandwidth to support high-quality VoIP telephone calls?
  • Will you need adaptors for legacy devices, like desk phones?
  • Should you increase security measures on your internet lines?

For most small business owners, setting up VoIP is as simple as signing up for the service. Once you’ve signed up, then you’re connected and can access your VoIP from any IP enabled device. Those with legacy systems or advanced needs benefit from extra support from their providers.

What happens if the power goes out?

In today’s fully connected office environment, a power outage is a crisis. You may not be able to process credit cards, connect with remote team members, or access data. Fortunately, your VoIP provider may offer solutions to avoid a disaster. Options for a power outage include:


  • Automatically route calls to mobile devices during an outage
  • Use an auto attendant to inform customers of their expected wait time
  • Rely on backup power supplies to run your VoIP phone system

Like with many common problems in the crisis planning and business resiliency space, retaining functionality in the event of an unplanned event like a power outage or loss of internet connectivity comes down to planning and foresight. Take the time to envision each scenario before it occurs, and figure out what your response will be ahead of time. This kind of preparation cuts down on indecisiveness when you’re in a high-pressure situation and allows you to respond faster. Whether it’s redundant systems or an emergency landline, you’ll be ready no matter what happens.

Are VoIP phone systems scalable?

One of the main selling points of VoIP phone systems is its scalability. You don’t need any infrastructure to add new lines. If you move your business, then your phone number and VoIP features go with you. Adding remote employees, new features, or extra equipment is easy as you only need to make a phone call or adjust your services from your dashboard.


Even more importantly, new users immediately have access to unified communications, call forwarding and all of the extra bells and whistles that VoIP phone systems make possible. The key to implementing effective VoIP systems for small businesses is to work with an internet service provider that understands your needs, both now and in the future. Partner with the right provider, and you’ll have a solution you can rely on for years to come.

How to Choose the Right VoIP Equipment for Your Business

Once you know how a business phone system supports your goals, then decide what type of equipment you need. Talk to your team, review your workflow, and ask a few essential questions. Make this process easier by working with a provider experienced in VoIP installation.

VoIP Installation, IT, and Support Needs

One of the best things about VoIP systems for small businesses is that it simplifies your IT and support needs. However, not all plans and providers offer the same level of support. Consider the abilities of your team, then decide what type of technical assistance you’ll need. Examples of support provided by various providers include:


  • VoIP installation, on-site or by phone
  • Pre-configured VoIP equipment
  • Online guides and knowledge bases
  • Telephone customer support line
  • Online chat or email support

Current and Future Business Benefits of VoIP

Switching providers is time-consuming. It’s essential to consider your present and future needs. If you start with a provider who supports growth by offering an array of upgrades and features, then you can futureproof your VoIP business phone system. For example, if you add more remote workers or require video conferencing for large rooms, then you can upgrade your service to include extra features. With the right provider, adding additional lines or new equipment is only a phone call away.

Assessing Office Layouts for Communication

A critical factor in deciding on a VoIP phone setup is understanding how your office layout affects connectivity. You may want to boost the signal in certain areas or account for differences in quality on floor levels. Your provider will work with you to determine if extra equipment is needed.

Selecting VoIP Handsets and Softphones

There are many VoIP handset options, including hard phones and softphones. While softphones work through an application on most devices, hard telephones are similar to traditional desk phones. If you’re using a legacy system, then you can use adaptors on existing equipment. Depending on what you’re using your phones for, it might make sense to go with VoIP-enabled telephones, or a headset connecting directly to a computer. Ultimately, choosing the best VoIP phone comes down to personal preference, so consider what your team needs and plan accordingly.

Group Conferencing IP Systems for Business

One of the most significant advantages of VoIP is how it simplifies group conferencing support. Voice over IP supports a variety of conferencing options, including video and audio. Start by determining how many users you may have in one session and what size of the room you’ll use. Both play a role in selecting a plan and equipment. Fortunately, if your needs change, then it’s easy to add extra features and equipment that help your entire team participate in group conferences.

VoIP Loudspeakers and Other Equipment

Clarity is paramount in using VoIP loudspeakers. Not all equipment is well-suited for large rooms, so it’s essential to review the specifications before purchase. Your VoIP provider will walk you through your options and help you find the best equipment for your needs.

Best VoIP Phones for Mobility

With VoIP phone systems, you can use practically any internet-connected device. If your company provides staff with VoIP telephones, then review your options for iOS and Android devices. Many plans also include features like hot desking. Hot desking allows your team to sit down anywhere, login, and connect. This works well for companies with shift workers or those who work from several desks. Your provider works with you to determine the type and quantity of phones needed for optimal productivity.

Tips for Taking Advantage of a VoIP System for Small Business

Taking advantage of VoIP systems for small businesses is a key way to grow while also improving current operations. With VoIP, you can keep in touch with customers and give your team more flexibility by upgrading your phone system. VoIP is a cost-effective solution that saves you money while satisfying the needs of both clients and employees. Work with a VoIP provider to experience the full benefits of VoIP. Your VoIP provider helps with:


  • Budget planning and stakeholder buy-in
  • Selecting features and equipment
  • Finding VoIP plans that fit current needs
  • Designating a strategy for business growth
  • Enhancing security and quality in your building

What can Cox Business Phone Services do for your business?

Stay connected to your customers with our small business phone services. Get enhanced features, integrate your existing equipment and provide a better experience.

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