Business Phone System Cost 2021: Everything You Need To Know

Business owners know that cash flow may be limited at times and understand the importance of saving a buck or two. While it may not seem like a lot, it all adds up. That is why nearly every single business owner will want to know what the cost is for a business phone system no matter how large or small the company is.

Phone systems are much more than just making or receiving a phone call in 2021. Unified communication systems allow a way to communicate, text, and use video to connect to customers. With various options to choose from, a business can enable growth as callers’ experience will improve tremendously, employees will be more productive, and any client you have will be pleased with the communication.

Keep reading about the different types of phone systems and what their benefits can do for your industry.

What Are The Different Types Of Phone Systems?

When considering what a phone system costs in 2021, you will want to know what type of phone system you will be purchasing.

Cloud or Hosted Phone Systems

A cloud or hosted phone system is a VoIP-based (Voice Over Internet Protocol) PBX component over the internet. If your business is looking to streamline communications, have higher security, and obtain advanced features, a cloud-based phone system is right for your business. It may also be referred to as hosted VoIP, virtual VoIP, hosted PBX, or Cloud VoIP.

Cloud-based calls can be made using a VoIP adapter with a traditional phone. The adapter will be plugged right into the wall or in your router.

Or you can make cloud-based calls with your computer through a program or application.

Some also use their smartphones to make cloud-based calls. Internet calls can be made using Skype, Whatsapp, and other apps.

You can also decide to purchase a dedicated VoIP phone. Instead of connecting to a phone line, these will connect directly to your computer network.

A cloud or hosted phone system can often be cheaper than other alternatives. As an added benefit, you will never have to worry about maintenance or setup.

Remote teams will also find cloud phone systems to be more flexible. They will not need to use their devices when they are working remotely or out of the office. A business phone number can be utilized on a cell phone to make and receive calls.

If you need a very reliable phone system, cloud systems are the way to go.


  • On-Premise Phone System

An on-premise phone system is installed in a building. There may be wires around the office that connect to a data centre in the office. IP technology can also be utilized to connect the phones via the internet.

Many times, the on-premise phone system is very costly to set up. While one may think this is a low-cost phone system, IP phones and SIP trunking are needed. Plus, all that equipment will take up valuable space.

If you decide to go the route of on-premise phone systems, you will need to hire an on-site IT person or use a 3rd party to maintain and repair the system.

Different Business Size Requires Different Type Of Business Phone Systems

Businesses can be large or small. And each one has their own needs to run successfully. Every company will require a different type of phone system. What works for one may not work well for another.

Not all phone systems are priced the same. Some will charge upfront, while others will only charge if you use them. Some do per user, per month plans as well.

There are also various features that you can pick from that may make the cost of your phone higher. These may include call reporting, phone backup system, mobility, hold music, call waiting, call monitoring, mobile and desktop apps, and the ability to handle simultaneous calls.

When determining what type of business phone system you need, think of the following questions:

  1. How big is your business, and how many employees do you have? Do you expect that in the future, that will change? If so, will it be easy to add more phone lines?
  2. Do you already have PBX equipment?
  3. How flexible do you desire your phone system to be?
  4. What devices will I be able to use to make phone calls?
  5. Can I keep my old phone number?
  6. What extra features come with the plan?
  7. How large is the call volume with each phone system?
  8. Is there emergency and disaster recovery in place? This will be critical if your business can not afford to have any downtown during any event that takes place, such as a fire, earthquake, or hurricane.

Solopreneurs and Local Shops

If you are a solopreneur or a local shop, you will be able to use Standard NBN phone lines with cordless phones or mobile phones with unlimited calls.

Standard NBN Phone Lines with cordless phones

A standard NBN phone line replaces landlines phones for phone and internet services. VoIP will enable you to make phone calls over your NBN connection. Cost-effective call charges are combined with the features of a traditional landline while phasing out copper phone services.

  • How much does it cost?

Generally, you can expect to pay $100-$150 per month for a standard NBN phone line with cordless phones. Quite a few NBN providers have plans with bundled home lines. Other providers will offer a pay-as-you-go option for add ons. You will need to sign up with the same provider from where you currently obtain your internet services.

Mobile phone with unlimited calls

A second option for a solo entrepreneur or local shop is a mobile phone with unlimited calls. You can utilize a phone system app on your mobile device to manage all of your work calls. You will have a virtual number that has the business number ring on the app when you have incoming calls. This allows you to decipher if people are calling you personally or the business. And when you call out from the app, your business number will show in other’s caller IDs.

  • How much does it cost?

This option will generally run you $100 – $150 + $50 per additional users.

Small Office or a team of up to 50

If you have a small office or a team of up to 50 people, you can use a cloud phone system or an on-premise phone system with SIP (session initiation protocol) trunks. Both of these services offer many features, including call training, contact storage, mobility, app integration, messaging, call control, collaboration tools, voicemail greeting, analytics, and web management tools, along with others.

Cloud Phone System

With a small office or business team, a cloud phone system will provide you with the scalability to both changes and expand the business. Your provider will be able to change your service as it needs to be done quickly. Updates will generally occur automatically, so your system will always be secure and up to date.

Your small business can significantly benefit from a cloud phone system. You will not have to worry about bulky equipment that may take up one room itself. There is no need to install cables, and installation is very quick. This kind of phone system is user-friendly, is very flexible, mobile, and perfect for business use. You can fax, have meetings, and complete business SMS with cloud phone systems.

  • How much does it cost?

You will typically see a $1000 upfront + $50 per additional lines/users cost for a cloud phone system. However, this is a more economical choice.

With cloud phone systems, many industries are taking the reins. Many healthcare, legal, real estate, retail, construction, and much more have chosen to use this type of business phone system.

On-Premise Phone System with SIP Trunks 

If you are a person who needs to be in control, the on-premise phone systems with SIP Trunks are for your business. Your IT team and yourself will be able to control all that goes on within the system. While you will meet all your company’s needs, your IT team will have a great responsibility.

The Session Initiation Protocol is a signalling rule used for starting, managing, and dismissing real-time sessions that incorporate voice, video, and messaging applications.

  • How much does it cost?

You can expect to pay $2000 upfront + $50 per additional lines / user. In the long run, you may find that this is a more economical choice for your business. You will not see a fee increase, and you will own the equipment for good once you pay for it. However, you will need to pay double upfront for what you would for a cloud phone system.

Enterprise Business with 50+ Staff

If you own an enterprise business with a staffing of 50 or more, you can go with an on-premise phone system with SIP Trunks.

On-Premise Phone System with SIP Trunks 

On-premise phone systems with SIP Trunking will connect your existing PBX to the internet.Your own on-site IT member will manage itr. This direct virtual connection is between two infrastructures- VoIP and your existing PBX equipment.

SIP trunking is very versatile. You can use it for calling and videos, emails, and other essential data all on the same line. You will not need additional lines to access faxes or the internet.

Should you decide to use SIP Trunking, you will need one of the following:

  1. An IP-allowed PBX on-site, OR
  2. a VoIP gateway to connect to your traditional PBX on the cloud.

When your company uses SIP, the phone systems will handle a larger number of calls. This makes your company have better reachability when your customers are calling you. However, if SIP is in place, you can have direct call routing and recording, multimedia messaging, instant data exchange, and video conferencing.

  • How much does it cost?

Typically, you can expect to pay a minimum of $5000 upfront + the equipment + the calling costs + $50 per additional line/user.

Features that can affect the cost of the phone system

There is a good deal of features that a phone system can either come with or have added on as an additional feature. Besides the additional features listed below, there are several others, such as auto attendance, mobile twinning, conference bridges, call logs, call parking, desk phones, and direct inward dialling. Depending upon what your business needs are can help determine what features you need for your business phone system.

  • Messages on Hold

Also known as MOH, this feature delivers a customized message to customers when they are placed on hold. This is the perfect feature to market your company. Not only will you decrease hang-ups, but you will also provide a professional image while promoting customer goodwill. During this time, you can provide suggestions, give business hours, update on upcoming products, or give details about an upcoming event.

Using messages on hold, you may be able to retain more sales. One in five customers will buy more than intended when they listen to these messages.

  • IVR System

An IVR, or interactive voice response, is a telephone response system that utilizes the dial pad for identification, segmentation, and routing of calls. You can create personalized greetings, prompts, and messages. By using an IVR system, you will increase customer service efficiency, first contact resolution, and agent and customer efficiency. You are also able to reduce operational costs, improve professionalism, and increase customer satisfaction.

  • Conferencing

Through conferencing, you have the opportunity to have more than three individuals on a single call. This is a perfect feature as many retail options will only allow up to 3 on a single call. These calls can have superior call quality with some options having the opportunity to host as many as 200 participants in a call!

There is also video conferencing, which has proven to be very effective in the past year with COVID. This may also be referred to as video chat, video calls, web conferencing, or Zoom. Your company will be allowed to hold face-to-face video conferences with any device that has enabled WIFI. Generally, this conference will take place on a third-party platform. Popular platforms include:

  • Zoom Meetings
  • GoToMeeting
  • RingCentral Video
  • Big Blue Buttons
  • BlueJeans Meetings
  • Lifesize
  • Clickmeetings
  • Microsoft Teams

It has been reported that a whopping 78% of companies are using video conferencing right now. Even if instant messaging, emailing, and other forms of communication are used, video conferencing is often a must for companies.

  • Call Reporting

With call reporting, a company can measure call extensions, location extensions, and call ads. You can look at details such as call start time and duration and what the call number was for phone calls over 15 minutes. Many will refer to call reporting as call monitoring, call analytics, or call tracking.

Call reporting will allow you to collect and measure data so you can learn more about the caller’s journey. Your business will be able to collect critical information that you can utilize to assist your business.

  • Phone Back-Up System

With a phone backup system, you will never have to worry about losing your data. If it would be lost, a backup is stored elsewhere, so your information is not lost.

  • Mobility

Forwarding calls directly to an employee’s cell phone while they are away from their desk is what this feature can do for you. This is perfect for those employees that are always on the go with the business.

  • Additional Labour Cost

Depending on what other labour needs to be completed will depend on how much you are charged for your business phone system.

  • Additional Equipements

If you need additional equipment, such as handsets, laptops, a desktop phone, conference phones, smartphones, or a single business phone, you will most likely be charged more.

  • Ongoing support & maintenance

If you need ongoing support and maintenance for your professional business phone, you could see a price increase. You may need to hire your own IT person or have a 3rd party company manage this for you.

Final Thoughts

When deciding upon a phone system for your business, it is essential to understand the many benefits of using a business phone system. Not only will you be able to receive and make calls from multiple devices, but you can also track usage, calls times, and hold times. Multiple users will all be able to share one number, and you can easily add new employees to this.

You can find many different phone systems geared towards different types of businesses, including solo entrepreneurs, small companies, and companies with more than 50 staff members. By looking at your situation and needs, you can find your company’s perfect business phone system. Take the time to investigate which option is right for you, as it will pay off in the long run!


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