VoIP phone system for small business: Is it worth it?

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No matter the size of your business, you need to equip yourself with a business internet phone. But is it necessary to invest in a business phone system? More specifically, should you switch to a business VoIP phone? The answer is yes. Even for a small business, VoIP is the perfect, modern solution for your organization.

Below, we will go over:

  • What a VoIP system is
  • How VoIP works 
  • The advantages and disadvantages
  • How VoIP differs from a traditional phone system
  • The steps required to make the switch.

What is VoIP?

A VoIP phone call from the RingCentral app to a mobile phone

VoIP or Voice over Internet Protocol emerged in the 1990s as a technology that channels phone calls through the internet’s data network. It has progressed to become the best and most versatile business internet phone solution on the market. 

Voice Over IP software works as follow:

  • A phone or headset records the voice. 
  • VoIP transforms it into raw data.
  • Data is compressed in real-time, converting them into data packets.
  • Packets travel to the VoIP service provider via a digital signal, where they’re converted and connected to the receiving phone.

The best feature of a VoIP phone system is the ease with which you can integrate it into your existing system. With integrated access, you can keep using your existing phone system to make VoIP calls. You’ll also be able to leverage the advanced features offered by VoIP technology.  

If you’re looking to break free from the desk phone, you can adopt cloud-based VoIP to make calls from your business phone number across all your devices. This allows you to make business calls anywhere, anytime. It affords you the flexibility to fit all your small business needs. 

This cloud-based system, called cloud PBX (Private Branch Exchanges), is ideal for small businesses. As a business owner, you’ll find that you and your team may have to be away from your desks for extended periods. Employing a system that enables you to answer business calls on your personal cell phones ensures no one in the team misses a call.

Advantages and disadvantages of using a VoIP phone system

Before committing to a particular system for business communications, there’s a lot to consider, especially for small businesses. You need to know if the investment is worth its payoff. From functionality to accessibility, think about VoIP advantages and disadvantages. Explore the following to see if VoIP is a business phone service that’ll work for you.

Advantages of VoIP


One of the primary VoIP advantages is that, especially with cloud PBX, it requires no equipment and no maintenance on your part. This means that investment costs are low. With traditional phone lines, adding new lines or putting in a new system may necessitate changes to the building's electrical wiring. Copper wiring is pricey and can add significant expenses to installing a new phone system. 

With VoIP, you can also use a softphone that works through your desktop or laptop. The ability to make calls over a softphone is a key feature of modern VoIP telephony, and this will be included in your cloud PBX plan. With a virtual phone system, the lack of required hardware means you get high-quality software for a lower cost.

If you have an existing phone system, you can use a VoIP adapter that bridges the gap between your analog phones and your new network. Also, because calls take place over the internet, long-distance and international calls are available at no extra cost. A small business VoIP phone system can help you keep up with your industry’s competitive market without breaking the bank.

Advanced features

With VoIP, you aren’t limited to a typical voice call. Services include:

  • Internet fax 
  • Conference calling 
  • An auto-attendant 
  • Call forwarding
  • Call routing
  • Call transfer
  • Toll-free numbers
  • Call recording and easy-to-access call logs
  • SMS
  • Email.

All these features are unified in a straightforward solution. As a small business, you need to communicate with your team and customers on multiple platforms. Cloud systems often offer a mobile app that enables you to make business calls with your mobile phone. This means you can reach customers and team members anywhere on any platform over one system. 

At RingCentral, we’ve developed a fully integrated desktop app that provides a collaborative workspace. RingEX brings together messaging, video, and calling capabilities in a unified communications solution that makes connecting with your team and customers simple. It has a considerable range of functions—from allowing you to switch devices during a meeting to creating groups and teams and speeding up and simplifying the process of finding people in your contacts. Watch this video to learn more about RingEX.

Watch a video of how RingCentral combines messaging, video, and phone into one communications solution

In addition to all the advanced features VoIP brings to the table, it also allows for smooth integrations with your other essential business applications—such as your Customer Relationship Management software (CRM). You can even build your own custom integrations through an API.

Aside from voice calls, RingCentral lets you send instant messages to your co-workers

Disadvantages of VoIP

Must have a reliable internet connection

VoIP makes direct calls through the internet, and cloud PBX relies on internet connectivity to access all your advanced features. Depending on your building, your internet service provider, and where you live, you may not have a steady internet connection. This can make using VoIP challenging. 

Using the internet or the traditional Public Switched Telephone Network (PSTN), occasional outages are inevitable. These outages can come in the form of lost power or internet connection. Traditional landlines can work during power outages, but your VoIP cannot. 

However, no matter the outage you experience, VoIP’s voicemail feature will take any messages you miss during your downtime. You’ll also be able to use your mobile device and its data to answer calls. 

Talk to your internet and VoIP providers before you commit to a VoIP phone solution. You must make sure that your internet bandwidth is good enough to support your new phone system.

May experience latency and jitter

While call quality with VoIP is typically excellent, there are circumstances where you might experience latency and jitter. For calls to reach their destination, they are first broken down into data packets to be reassembled. During this process, transmission can be delayed or data improperly assembled. 

This can be prevented with good broadband service. As long as you have sufficient bandwidth, an updated router, and a backup Ethernet cable, you should experience voice quality that trumps a traditional landline.

VoIP vs Landline

So, what exactly are the differences between traditional telephone systems (PSTN) and VoIP. Below we will break down the differences by:

  • Hardware
  • Process
  • Efficiency
  • Scalability
  • Maintenance
  • Redundancy 
  • Stability
  • Cost.
Comparing PSTN and VoIP Systems for Small Business
Feature PSTN VoIP
Hardware A traditional PBX system requires expensive and bulky equipment. To use PSTN, you need telephones, lines, cables, switching centers, and more. With VoIP, all the hardware you need is the equipment you already have. This includes a router, Ethernet cables, desktop or laptop, and a mobile device. It can also include a traditional phone. You can communicate on whatever device works best for your business.
Process A PSTN uses circuit switching to make calls when you dial a number on your landline. You will get basic call features like caller ID, hold, and call waiting. As we’ve discussed, VoIP transforms voice data into data packets that carry information. In addition to voice calls, you can utilize voicemail, video conferencing, text messaging, faxing, call recording, and so much more.
Efficiency A PSTN network lacks efficiency. From the way the network converts signals to the way it helps you communicate, it’s clunky and outdated. VoIP experiences less congestion than PSTN. It also allows you to add and get rid of phone lines as required by your business. This enables you to handle your communication needs efficiently and effectively.
Scalability Because traditional landline phones require expensive equipment and wiring for each line, it’s difficult and costly for your phone system to grow with your business. A VoIP solution is perfect for small businesses because it can grow with you. You can easily add additional lines or reduce lines and be billed accordingly. It’s a cost-saving way to communicate.
Maintenance With PSTN, your phone company will only provide the maintenance included in your contract. Hardware and wiring will also need regular maintenance that your team must carry out. Because a lot of small businesses lack a specific IT department, VoIP provides a perfect solution. With Cloud PBX, the maintenance is almost entirely in the hands of your VoIP service provider. All you need to do is update your router regularly.
Redundancy PSTN lines are fixed lines. PSTN telephone lines can become overloaded when there are natural disasters and there are no calls going out or coming in. With a VoIP phone system, data centers can be turned up immediately and have their call volumes re-routed to other areas. IT can choose alternative data centers in order to meet regulations.
Cost PSTN lines will incur costs for hardware, maintenance, long-distance, international calling rates, and price per line. While you can find contracts that bundle features, they still may incur extra surprise expenses leading to a pricey phone bill. Because a VoIP phone service has easy scalability, you only pay for what you need. For a small business, you can use month-to-month plans with transparent pricing that will make the most of your operating budget. There are no hidden call rates.

How to implement VoIP in your small business

By now, you may realize that VoIP is the best solution for your company, but you still might not know how to go about setting it up for your small business. Don’t worry! Once you know the steps, it’s a straightforward process to implement VoIP. You should:

  1. Pick a service provider that best suits your needs.
  2. Choose or import your existing phone number or phone numbers.
  3. Add users to your service.
  4. Create routing, call waiting, and call forwarding rules.
  5. Integrate your VoIP with your other applications.

1. Pick a VoIP service provider

The first step you must take is to choose the best VoIP provider for your business. The service you pick needs to have the features and benefits that put you ahead of your competition. Make sure that your business VoIP provider:

  • Has a good reputation
  • Takes security seriously and is transparent about how they use your customers’ data
  • Provides clear pricing and good value VoIP plans
  • Delivers excellent customer support
  • Will help you with implementation for an easy set-up.

Here at RingCentral, we have both monthly and annual plans where you only pay for users per month and the features you need. You can use your iOS or Android mobile device to make calls or send texts or faxes from anywhere using your business numbers. We also have high-level encryption and award-winning customer support that will help you every step of the way.

2. Choose or import your existing phone numbers

VoIP for small businesses is excellent in terms of flexibility with phone numbers and the number of users. Keeping the same number is good for an established company. With RingCentral as a service provider, your cloud PBX will import all your current numbers and allow you to add or remove users as business needs change. With user log-in information, you’ll be able to access your VoIP phones from any device.

3. Add users to your VoIP phone service

This is an essential part of setting up your VoIP network. If you’re a small business, this may be only one or several lines. However, setting up the users you need right away allows for better team collaboration. Your team will immediately be able to receive calls internally and externally while taking advantage of conferencing features.

4. Create routing, call waiting, and call forwarding rules

Creating these rules will allow you to get the most out of your new office phone. It will make sure that your customers always reach the right people. The call forward feature is great to ensure that a customer or vendor can reach another team member if their regular contact is out of the office.

5. Integrate business apps to your VoIP phone system

The last step is to integrate with your business’s other applications. The benefit of VoIP calling is that you can make your entire system work together seamlessly to provide the best service to your customers. For example, CRM integrations allow you to keep track of customer behaviors to direct you on exactly how and when to interact with them to boost sales and improve customer retention.

A phone service for business of all sizes

The future of business telephony is in virtual phones. It doesn’t matter if you’re a small or midsized business; you can take advantage of all the features a VoIP phone system has to offer. If you want to learn more about how to switch to VoIP, talk to our RingCentral team and download a demo today!