Is VoIP good for small business?

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A small business owner using her VoIP-enabled phone to speak with her field staff

VoIP (or Voice over Internet Protocol) phone systems are perfect for small businesses. Don’t believe us? Just look at their history together. 

Back in the day, small and mid-sized businesses didn’t have the budget and resources to buy, install, and manage the traditional on-premise business phone systems that big companies were using.

Because of this, they looked for alternatives that could give them the same benefits without going beyond their budget. One of the options they found was VoIP.

Bursting onto the scene in the 1990s, this technology lets people make long-distance and international calls at a much lower cost than making the calls through old-school phone networks.

Even the best VoIP phone systems are still more affordable than the cheapest traditional on-premise systems while matching (even outdoing!) these older, more expensive systems.

Suddenly, smaller companies could compete (and sometimes even win) against bigger companies—especially when it comes to communicating with customers.

A small business owner using VoIP

What is VoIP and how can it benefit a business?

VoIP Definition

So how exactly does VoIP help smaller organizations communicate with customers better than big companies could?

First things first: let’s define what VoIP is.

Simply put, VoIP is the technology that lets you make and receive calls over the internet. You can use it from anywhere, whether you’re in a café, at home, or even away on a beach (as long as you have internet). You’re not tied to your desk the way you would be with regular landlines, which need the pre-installed copper wires that the public switched telephone network (PSTN) needs to work.

TL;DR - If you’re waiting for a call, you can’t go anywhere else when you’re using traditional phone lines. But that’s not a problem with Voice over IP. 

When used for business, VoIP usually works with cloud PBX. 

PBX is a phone technology that helps companies manage incoming phone calls by letting them send each call to the right person or department. Traditional (on-premise) PBX phone systems use physical phone lines that force you to stay in one location. Cloud PBX works via the internet—like VoIP does— so calls reach the right people, no matter where they're working. 

Together, VoIP and cloud PBX form what businesses usually refer to as a VoIP phone system.

How a VoIP phone system works

Benefits of a VoIP phone system to small businesses

What makes VoIP phone systems a perfect match to small businesses is the value it gives for your money.

This leads to a lot of cost-savings. For instance:

You don’t need to buy expensive hardware and equipment

If you’re working traditional on-premise phone systems, you need to buy expensive hardware and equipment (like multiple servers and PBX boxes). Worse, you have to hire experts to install, manage, and maintain them.

On-premise systems can get so expensive that only big corporations can afford to build one for their needs. A small business could try to build its own, but it would probably be so over budget that there would be no money left for anything else.

The good news is that you don’t have to build your own phone system. Modern VoIP phone systems are usually cloud-based. This means the whole service is hosted and managed by the provider in their own data center. From there, the system is delivered to your business through the internet. You don’t even have to worry about upgrades and updates—your VoIP provider takes care of them too.

You only pay for what you need

One of the biggest reasons why VoIP is good for small businesses is that you only pay for what you need.

  • Per-user charges 
    VoIP providers usually charge customers on a monthly per-user plan, which means your monthly phone bill is based on how many VoIP users you have instead of all the minutes used by your entire company.
  • No surprise charges
    Typically, there are no hidden costs in VoIP plans. With traditional systems, you’d think that you only need to worry about buying the hardware and software to run the system.

    Surprise! In the long run, you get billed for firmware upgrades, replacement and upgrade of hardware parts, telecom charges (especially long-distance calls), and more.

    With VoIP, you get a predictable monthly phone bill so it’s easier to plan your budget. You don’t have to worry about allocating budget to fix broken parts or wonder who made that five-hour long-distance call to Canada. (VoIP providers typically offer unlimited calling across the United States and Canada!)
  • No commitment
    You’re not buying the VoIP phone system; you’re just subscribing to the service. This means you only pay for it as long as you’re using it. When you don’t need it anymore (or if you find a better alternative), you can simply cancel your subscription and move on.

You don’t have to use your personal mobile plans for business-related calls

Mobile phone display showing caller ID

Imagine you’re a real estate broker, a personal injury lawyer, or a sales executive who’s constantly out of the office.

If you’re not using VoIP, you won’t be able to make calls using your business phone number outside work because it’s tied to your office landline phone. So, you’re forced to use your personal cell phone number and your personal mobile plan gets charged.

If you’re using VoIP, you can use the VoIP provider’s softphone app to access your company phone number with either a laptop or a mobile device. There’s no need to use your own mobile minutes when you can use your official business phone number to call (or receive calls from) customers and clients.

You don’t need to pay extra for advanced features

Modern VoIP phone systems also give you call handling features that make it easier for you to communicate with customers.

With traditional landline phone systems, you have to pay extra for additional features. These include "advanced" landline features that are considered basic in modern VoIP systems, such as:

  • caller ID
  • call forwarding
  • multiple caller options (three-way and conference calls)  
  • call screening and blocking

These features are usually included in your VoIP plans.

Then there are features that help small businesses project a more professional image by streamlining their call flow (basically the path that calls “travel” through your company’s PBX). Imagine having your incoming phone calls handled like this:

  1. An automated attendant starts with a pleasant professionally recorded greeting. Nothing says “big company” more than having your incoming calls answered like this.
  2. Callers are presented with a phone menu that lets them use their dialpad to find specific employees or departments. Based on the choice of the caller, their call will be sent to the right virtual extensions within your organization.
  3. These virtual phone extensions, like your business phone numbers, can also be accessed and used outside the office. This means that even if your employees are out of the office, calls can still be sent their way via their virtual extension.
  4. You can set custom messages or music-on-hold. This way, your customers won’t have to listen to dead air while they’re waiting for their calls to get picked up.

Bonus: You also don’t have to pay extra for other communication tools like video conferencing, business SMS, and virtual fax.

These are usually not included in traditional systems—you’d have to get a separate provider for each one, meaning more expenses. And you’re not even sure if they’re compatible with each other!

With a VoIP phone system, you get all the features you need from one platform, under one phone bill.

An employee working from home

How much does VoIP service cost?

The best VoIP service for small businesses ultimately depends on what your business needs. Do you have employees who need to work outside the office? Do you have work-from-home people? Do you do a lot of long-distance or international calls? Maybe you don’t do many outbound calls but get a lot of incoming calls.

Those questions will dictate which VoIP service best serves your needs.

If you’re looking to VoIP, RingCentral is a solution that’s designed to help both big and small companies communicate more smoothly. The best thing? It fits seamlessly into how your business already operates.

What's the RingCentral VoIP phone system?

The RingCentral VoIP phone system is a secure and reliable cloud-based unified communications solution that includes enterprise-grade VoIP, cloud PBX, virtual faxing, business SMS, and online meetings, with over 50 communications and collaboration features.

Get started quickly with a new local or toll-free number or transfer your existing phone number to your new VoIP phone system. Curious about how it works? Take RingCentral for a spin via a free trial.

RingCentral Business Communications plans for your small business

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