Topic overview

Business telephone systems

Business telephone systems

Business telephone systemsCommunication has evolved. With instant messaging, social media and mass-market video conferencing now at the world's fingertips, overlooking the importance of a great phone system is a common mistake made by business owners.

Happily, the prevalence of high-speed internet connectivity, powerful mobile devices and a significant reduction in the size and cost of hardware means that businesses can invest smartly in phone systems which won't break the bank. These business phone systems can provide a level of connectivity and flexibility simply unheard of even ten years ago.

Types of business telephony

Broadly, there are five types of business phone system to choose from:

  • Virtual phone systems. Think of your old, traditional switchboard, but modelled completely in software and capable of creating a virtual phone system by using a mixture of mobile phones and landlines.
  • VoIP (Voice over Internet Protocol). VoIP phone systems draw their connectivity from the internet.
  • Self-hosted VoIP. The business pays for the VoIP hardware required and hosts it in their own premises.
  • Cloud-based VoIP. Removes the requirement for any hardware (other than IP phones) on site and moves the switchboard element to the service provider's servers.
  • Dedicated phone lines. A traditional phone system utilising copper wires and, usually, hardware-based central switchboards.

The lines between office phone systems and other elements of business communications are blurring. This has led to the emergence of powerful unified messaging systems, which tie together different communication tools.

A good unified messaging system is very flexible. For instance, it can automatically divert calls to your mobile when you're out of the office or display data from your CRM system when a customer calls. The best way to explore the options is to speak to an IT supplier.

Which business phone system?

Armed with the knowledge above, it's time to ask yourself three questions:

  1. Do you require a full phone system that includes physical office telephones or could your business and its staff get by using solely their mobile phones?
  2. If you require physical devices, is your internet connection quick enough to enable a VoIP system?
  3. If VoIP is a possibility, do you want to host the equipment or rely on cloud hosting?

Consider exactly what you need to do with your phone system and how you expect to use it. For example, will everyone be based in one place or will they roam? How many people are you connecting?

Build up a clear picture of the volume and type of calls you expect to make and receive and think about how you expect your business to grow; it is important to choose a system that can grow with you cost-effectively.

Virtual phone system

Works by connecting a business phone number to one or many mobile phones and landlines. Software is used to set up call-forwarding, queuing and phone tree feature.

Ideal if you're a sole trader or run a business that consists of remote workers.


  • No expensive equipment required
  • Simple to set up and maintain via one piece of software
  • Offers the professionalism and configurability of traditional phone systems at a fraction of the cost


  • Service providers may insist on a 12-month minimum contract making switching providers difficult
  • Outbound calls will still be at the expense of the landline or mobile
  • Some lower-cost systems can suffer from poor call quality

VoIP (Voice over IP) phone system

Works by using your internet connection to provide your business phones with connectivity, rather than traditional copper wires.

Ideal if you're a small to medium-sized business with a mixture of on-site and remote workers that wants the features of a sophisticated phone system for a reasonable outlay.


  • Offers significant cost savings over traditional business phone systems
  • Easy to set up
  • Highly portable
  • Wide range of low-cost phone hardware available


  • Relies on your internet connection
  • Sound quality sometimes suffers depending on the bandwidth available

Self-hosted or cloud-based?

The way in which you host your VoIP phone system will depend largely on the space available for telephony equipment and your budget.

Self-hosted systems offer peace of mind that the hardware is entirely within your control, but cloud-based VoIP is quicker to deploy and easier to scale should your business grow.

Dedicated phone lines

Works by using traditional copper telephone lines and is typically supported by your local or regional phone company.

Ideal if you suffer from poor internet access and/or are a large business with the in-house technical staff and hardware infrastructure required.


  • Tried and tested technology
  • Reliable and non-reliant on your internet connection
  • Most business premises have pre-existing copper phone infrastructure


  • More expensive than the new virtual and VoIP alternatives
  • Maintenance requirements can be costly
  • Scalability is often limited or only available at significant cost to the business

Traditional small business phone system

VoIP and virtual phone systems should be the first option for your business, but if you are hampered by a poor internet connection, it is worth revisiting the types of traditional phone systems available to you.

There are two traditional phone systems which small businesses have relied on for many years:

  • 'Key' systems have one or more telephone lines coming into your business and every connected telephone will ring when someone calls. Key systems are suitable for businesses with up to five employees and cost from £10 - £25 per month per phone line depending on the features you require.
  • Switchboard systems. A switchboard (sometimes referred to as a 'PBX') offers more capability than a Key system by routing calls to particular extensions, taking voicemail and allocating spare lines to outgoing calls. Entry-level switchboards cost from £150 and come in both hardware and software form.

Outsourced phone systems

If you'd like to take the business of processing calls completely off your premises, you could benefit from the rise in virtual reception desks or 'eReceptionists'. This essentially means outsourcing your call centre to a third party which deals with all incoming calls for you and routes them through to your own number if required.

If you're a seasonal business or sole trader wishing to give clients big company telephone service, outsourcing your phone system entirely may be the best option.


The benefits of virtual telephone systems and VoIP are hard to ignore. Advancements in technology have brought solutions previously reserved for large corporations to the masses.

The new breed of telephone systems has introduced a raft of advanced features which can speed up your business processes and increase customer satisfaction. They include:

  • Special phone numbers, such as free, low-cost or premium rate
  • Call forwarding and voicemail, enabling employees to forward calls onto one another and leave messages
  • Instant messaging, which can be a brilliant alternative to email when quick messages need to be exchanged
  • Conference calling, without the need for an expensive third-party system
  • Interactive voice response (IVR) systems, which automatically answer calls and direct them appropriately

Office phone system suppliers

Because telephone system requirements vary, it's important you find an appropriate supplier. A good way to start is to seek recommendations from similar businesses. It's also worth speaking to your existing IT supplier, as many will offer the latest in VoIP and virtual telephone technology.

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