As a small business owner, you’re used to juggling a lot at once. You’ve been conducting more business remotely, and it’s been working out great — for you, your employees, and your customers.

However, it’s made you aware of the limitations of your current phone system and how you handle business communications. It’s clear it’s time for an upgrade — one that has more features and functionality to serve the needs of your growing business. And it must adapt to however you need to do business — in the office or remotely. 

To help you zero in on the right choice for you, we’ve put together an overview of the types of small business phone systems and a checklist of the features you should look for. And finally, we’ll share an option that just may be everything you’d ever hope for. 

Why You Need a Modern Phone System

If you’re selling a product or a service, you want to project a professional image. And you can’t do that if you’re making phone calls from a personal cellphone number or using an antiquated phone system that doesn’t have the ability to text.

Modern phone systems allow you to conduct business from anywhere, to support your remote employees, and to provide the level of service your customers expect  through the communication channels they prefer. 

Types of Small Business Phone Services

There’s a ton of acronyms and terminology to describe the types of phone systems being used by businesses today — and some can be used in combination too.  But in the interest of keeping things simple, we’ll divide them into two categories: on-premises phone solutions and cloud-based phone solutions. 

On-Premises Phone Solutions

There are two kinds of on-premises solutions: landline phones and private branch exchange.

Traditional Landline

Companies once exclusively used traditional analog landline systems installed by phone service providers. Though they were reliable and produced great call quality, these phone systems were costly to set up and maintain. 

Today, analog lines are still in use within large institutions and in places without access to a reliable high-speed internet connection.

But most companies have moved on to phone solutions that provide more features than call transfer and call waiting. 

Private Branch Exchange (PBX)

As phone lines became digitized, businesses started implementing private branch exchanges, or private telephone networks within their own company. 

These systems require expensive hardware, proprietary office phones, and on-site expertise to maintain, but they provide advanced calling features like call recording, voicemail, call queues, and interactive voice menus (IVR). And they can be further customized to meet a business’ needs.

However, these solutions still don’t meet the needs of modern businesses, particularly for those with workers who don’t need to be tethered to a desk phone waiting for inbound calls. 

Cloud-Based Phone Solutions

The advent of Voice over Internet Protocol (VoIP) and its ability to place calls over the internet was a game-changer for business communications. There are two kinds of VoIP services: hosted and virtual.

Hosted VoIP Phone System

Most modern business phone providers use VoIP in conjunction with PBX technology — hosting the PBX hardware off-site for the client. This combination makes robust features like call recording and auto-attendant more affordable for small businesses.  

These systems integrate with VoIP phones. So while the phone service is cloud-based, the VoIP phones are needed in the office to connect to the service. 

Hosted VoIPs also include online interfaces that make administrative tasks easy, like adding users and making customizations to the system. Some systems can even integrate with many of the productivity and workflow tools businesses already have in place. 

This added functionality costs a lot less than on-site PBX systems. 

But for the most flexibility at an even lower cost, VoIP really comes to life through a virtual phone system.

Virtual VoIP Phone System

A totally virtual phone system also uses VoIP. But there’s no expensive backend hardware to manage yourself or to pay a vendor to host on your behalf. Users simply download an app that turns their desktop or mobile device into a “softphone” that can place calls over the internet. 

Virtual phone systems provide robust calling features and integrations, but because they are virtual, they may lack certain features of a unified communication system like video conferencing. 

However, the many benefits of a virtual phone system — like low pricing, easy installation, scalability, and lightweight footprint, to name a few — far outweigh the drawbacks of including an additional app or two to your business’s toolbox. 

Key Features To Look for in a Business Phone System

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There are a lot of vendors in the business phone system space, from legacy providers to relative newcomers, each providing a range of features at different price points. Some vendors charge a premium for features that others consider standard, while some vendors don’t offer them at all. 

Here’s a list of features you may want in your small business phone system. Use it as a checklist as you evaluate service providers. 

  • Local numbers: Looking like a “local” — even if you’re not — is important. Everyone has caller ID, and no one picks up unfamiliar long-distance numbers, right? 
  • Toll-free numbers: It’s so uncool to make your customers pay to call you.
  • Unlimited calling and texting in the U.S. and Canada: You don’t want to be nickel and dimed for calling and texting the places you conduct most of your business.
  • Affordable international calling: The ability to call anyone, anywhere at reasonable rates is critical for modern-day businesses with employees and customers spread out around the globe.
  • Text (SMS), picture (MMS), and group messaging: You don’t always need to have live conversations to conduct business. Wouldn’t it be awesome if you could send texts, pictures, videos, or have group messaging conversations?  
  • Auto-attendant with call routing: You and your employees can stay on task instead of fielding inbound calls. An automated virtual receptionist, sometimes known as an IVR system, can get customers to the right person quickly.
  • Call recording: Set up a script to record all your calls or record on demand for training, transcription, or legal purposes.
  • Call forwarding: You’ll want to be able to set up call forwarding tailored to meet your unique business needs.
  • Voicemail to text: Having voicemails automatically transcribed via text message when you miss a call is a major time saver.
  • Multiple devices: A phone system should be compatible with your iOS or Android mobile device, or your Windows or macOS computer. And you should be able to use it with whatever web browser you want — Chrome, Safari, or Firefox. Not all systems have a desktop and a mobile app.  
  • Snippets and auto-replies: Speed up your response time to frequently asked questions or set up automatic out-of-office replies so you can enjoy personal time.
  • Business hours: Speaking of “me time,” you don’t want to be bothered by your business phone ringing on personal devices when your workday is done. 
  • Keyboard shortcuts: Be a paragon of efficiency with easy-to-remember and customizable keyboard shortcuts.

  • Shared phone numbers: Make sure a team member’s got your back when you’re away. Shared phone numbers, like a shared email inbox, ensure that incoming calls from customers and prospects are always taken care of.
  • Reporting and analytics: Insight into interactions with customers helps you serve them better. 
  • A stunning, simple user interface: Some interfaces aren’t pretty, and some are so complicated they require training. Find one that makes you “ooh” and “aah” and gets you up and running in a minute.  
  • CRM and workflow integrations: Be sure you can leverage the business tools you already use like Slack, HubSpot, Salesforce, and Zapier.

OpenPhone: The No. 1 Small Business Phone System

Small business phone service: Screenshot of the OpenPhone app on mobile

You know the litany of features we listed above? Well, those are all OpenPhone features. Many are add-ons with the other guys, but nearly all of them come standard with OpenPhone for only $10 per user per month. 

We might be a bit biased, but you don’t have to take our word for it. Thousands of happy customers can’t be wrong. When you use OpenPhone, you’ll be saying things like “Solid, Streamlined, Seductive, Superpowered” and “OpenPhone is the greatest.”  

Our virtual phone system will transform the way you do business. And because we’re constantly finding new ways to delight our customers with enhanced features and functionality, we’re gonna keep redefining greatness.

Check out OpenPhone with a free trial and see how you can be up and running with your business phone in about a minute!

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Amy is a professional B2B writer who drives results for SaaS and marketing brands. Like a chameleon, she instantly assumes a brand's unique voice and delivers content that never bores readers.

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