Small Business Phone System: Types, Key Features & Cost


Business phone systems have become a part and parcel of every company, especially the small-scale enterprises. A few years back, legacy telephone systems that brought with them lots of wires and hardware were ruling the market. But for small businesses, it was difficult to afford such a huge initial investment as well as long-term maintenance.

However, today, the scenario has totally changed, where phone solutions for small businesses are being conveniently adopted and used by companies of both small and large sizes. Since the “customer-centric” approach is being highly practiced by businesses these days and “Phone Calls” are the No.1 mode of communication preferred by customers, phone solutions for small businesses are now a necessity. Source

Let us understand the concept further.

What is a Small Business Phone System?

A phone system for small businesses is a communication system consisting of office telephones and mobiles, which are interlinked for call handling, call transfer, multilevel IVR, and voicemails. This type of phone system can function over a Public Switched Telephone Network (PSTN) or over the Internet. Designed specifically for SMBs, such phone systems offer cost-effective and scalable options to streamline communication and improve the overall productivity of businesses.

How Does a Business Phone System Work?

Small Business Phone Systems connect and manage inbound and outbound calls within an organization. When a call arrives, the phone system routes it to the most suitable destination which could be an extension or a department. these systems also handle calls by using various features such as call queue, voicemail, etc., as and when needed. Business Phone Systems also offer features for internal collaboration such as call conferencing and call recording, which are quite useful for employees.

Why do Small Businesses Need a Phone System?

Professional Image

A Phone System can be an important component of the business system to build credibility and trust with the customers. With a dedicated phone number, businesses are able to project a professional image in front of their audience. Features like IVR, and personalized voicemail greetings further convey a sense of reliability.

Enhanced Customer Service

With a phone system, business queries in the form of incoming calls get managed efficiently. By implementing features such as call routing, call forwarding, etc., a company ensures that no calls are missed or unanswered. This leads to greater customer satisfaction and loyalty.

Improved Collaboration

Features like Call transfer, conference calls, etc., facilitate seamless internal collaboration among the employees of the business, regardless of their location. This fosters improved teamwork and enhanced productivity.

Scalability and Flexibility

When small businesses grow, their needs and requirements change. Business Phone Systems are designed to adapt to these changes, allowing companies to add or remove phone lines as per their convenience.

Cost Savings

Modern-day business phone systems are cloud-based, which makes them an extremely popular option among small businesses. Unlike traditional phone systems that are hardware-based, modern business phone systems can be easily afforded by small to medium-sized companies.

Types of Small Business Phone Systems

Phone solutions for small business are of various types, 4 of the main types are explained below:

Traditional Landline Phone Systems

Also called Public Switched Telephone Networks or PSTN systems have been the standard phone systems for several decades. The functioning of these systems is based on physical copper wires that transmitted voice signals over a telephone network. These systems are installed on-premise and offer reliability and call quality. They require extensive equipment for their setup and are limited in terms of features, functionalities, and scalability. 

Cloud-Based Phone Systems

Also called hosted phone systems, these phone systems offer better flexibility and cost-effectiveness as compared to PSTN systems. Here the phone systems work over the Internet and do not require physical phone lines. The entire phone infrastructure is run and maintained by a third-party vendor. Also, these phone systems offer advanced-level features such as call routing, voicemail to email, auto attendants, etc. 

Cloud-based business phone systems are popularly used by small business enterprises that may not have offices in multiple locations or a large workforce. However, these companies may still have communication needs to engage with customers, partners, and colleagues. As per stats, in the year 2020, corporate cloud telephone system subscribers reached 204.8 billion. That’s a big number! Further, this market is expected to grow at a CAGR of 12% between the years 2020 to 2025.

Virtual Phone Systems

Virtual Phone Systems are part of cloud-based business phone systems that cater particularly to small businesses. These systems make an excellent choice for small startups. The working of these systems is the same as that of cloud phone systems i.e. over the internet and do not require any hardware. Some of the most useful features offered by virtual phone systems are virtual phone numbers, IVR, Call Forwarding, Voicemail, etc. 

IP-PBX Phone Systems

These phone systems combine the benefits of traditional PBX phone systems with VoIP technology. These systems are suitable for large organizations and are deployed on-premise. In terms of features and functionalities, IP-PBX phone systems offer various advanced features call transfer, call conferencing, IVR, etc. 

Key Features to Look for in a Small Business Phone System

Call Routing

It is one of the primary and most useful features of business phone systems. Based on some predefined rules set by the business, call routing directs incoming calls to the appropriate destination. With this, the call waiting time gets significantly reduced which further leads to enhanced customer satisfaction. So when there are high call volumes, businesses need not worry as incoming calls get managed efficiently. 

Multi-level IVR

Another important feature of the business phone system is that enables the business to create a hierarchical menu system. A multilevel IVR presents multiple levels of options for callers so that they can choose the most suitable one. The IVR system guides them through the menu to reach the most suitable agent or department. It also streamlines call flow and improves call handling efficiency. 

Text to Speech

This is also a valuable feature of business phone systems that help in recording voice prompts for the IVR menu. This system works by converting the entered text into audio or spoken words in different voice tones. A business can enter the desired IVR menu prompts and choose the converted audio tone that best matches its brand image. 

Click to Call Buttons

These are popularly used on websites, email signatures, and other marketing communication materials. Through click-to-call buttons, businesses offer customers a convenient and effective way to communicate. Customers do not need to search or dial the phone numbers of a business, rather they can simply initiate the call by clicking the button from their device. 

Call Recording

Another crucial feature of the business phone systems as it helps in monitoring and analyzing customer agent interactions. With this feature, calls can be recorded and stored for future reference. These recordings can also be used to provide training to new and existing agents. Another important use of call recordings is that these can be used as evidence in legal lawsuits when a dispute arises with a customer. 

Business Phone Number

A dedicated phone number that represents your business is simply essential to portray a professional image of your company. This also ensures that your personal and business communication remains separated. Business phone numbers are of different types such as Toll-Free numbers, Vanity Numbers, DID numbers, etc. You can choose one or multiple numbers as per the need of your business. 

Mobile App

With a mobile app for the business phone system, a business can simply do wonders. Employees and agents are able to connect with their work, take calls and do tasks from their mobile devices. So they do not need to open the web application each and every time. This supports mobility and promotes productivity. 

Smart Dashboard

A business phone system with a user-friendly and smart dashboard makes things a whole lot easier. Users can get real-time business insights with a few clicks. It becomes extremely easy to check call patterns and make data-driven decisions. 


This feature allows callers to record and leave their voice messages when there is no one available to answer their call. So voicemail features ensure that no important calls are missed and that agents can respond to voicemail messages instantly. Voicemail messages can be accessed through the small business phone systems or sent as attachments to email thus offering flexibility to check messages. 

Call Forwarding

This feature allows the automatic forwarding of incoming calls to alternative phone numbers. It’s particularly useful for remote employees as they can ensure that calls are answered regardless of their location or availability. 

How do I Set Up A Small Business Phone System?

Setting up a small business phone system might appear like a tough task, but answering certain questions can really help you in the process. Some of the key questions  to ask yourself are:

  • What are your business requirements? What is your employee count?
  • Which type of phone solution for small businesses will suit your company?
  • What features do you require in your phone system for small business?

How Do I Choose the Best Small Business Phone System?

To make sure that you get the best small office phone system, you must always choose a reliable service provider. This is important because a reputed vendor will ensure the best services in the market. Here are some pointers to keep in mind:

1. Ensure 24/7 customer support from your vendor

Availability of technical support from your vendor is important as you might need their assistance in case you encounter a technical glitch or need help with something in the business phone system.

2. Make sure Service Level Agreements (SLAs) guarantee a genuine uptime

It is important to know the uptime guaranteed by your vendor. So make sure you check the SLA and set your expectations as high as possible. Cloud-based phone systems vendors guarantee 99.99% uptime.

3. Ensure Compliance with Industry Standards

Adhering to industry standards is crucial to ensure that the phone system for small business is capable of securing your business data. Check with your vendor whether they comply with the industry security standards like HIPPA, GDPR, etc.

4. Check customer reviews, feedback, and recommendations to estimate the real value of your vendor

A little research can really do wonders when choosing the right vendor. Look for online reviews about the product, see what people liked, and the problems they encountered while using the phone system. This way, you will be able to find that one phone system that really aligns with your business.

How Much Do Small Business Phone Systems Cost?

Modern-day Small Office Phone Systems are extremely cost-effective these days. Since these systems are hosted by service providers and handle all the maintenance work also, you just need to pay a subscription fee, be it monthly or yearly, that’s your choice.

To Sum Up!

Choosing a small business phone system involves a lot of things such as price comparison, features, and your requirements. You need to analyze everything in detail before making the right decision.

KloudTalk is a Cloud-Based Business Phone System for Small, Mid-sized as well as Large companies. It comes with all the required features of a small business such as Multi-level IVR, Click to Call, Text to Speech, Business Phone Number, and Call Recording to name a few. It comes with a free trial of 14 Days during which you can test all features.

Certainly, a small business phone system is suitable for startups as these systems offer benefits like cost-effectiveness, scalability, feature-rich, easy setup, remote work support, etc.

Reputable providers implement the latest encryption protocols, MFA, regular updates and patches, maintain redundancy and data backups and implement extensive monitoring that safeguards against cyber threats.

Yes, cloud-based small business phone systems are easily scalable which means you can add more phone lines as your business grows. These phone lines can also be easily removed when not required.

Note – This post was last updated on 31-07-2023.

 14591 Views    0 Comments

Leave a Reply

Your email address will not be published.

Get Started - 14 days free trial

Copyright © 2024 KLOUDTALK. All Rights Reserved.