Getting phone service for a small bussiness use to be simple; call the provider and they installed the needed lines. Today, Voice over IP (VoIP) gives businesses far more flexibility and lower costs, but the number of options can be overwhelming. Here is a straightforward guide to making the right choice.
Hosted vs On-Premise: The First Decision
Hosted (cloud) VoIP means your provider runs the phone system on their servers over your Internet connection. You plug in handsets or use softphone apps, and everything is managed remotely. This is ideal for businesses with fewer than 50 users who want low upfront costs and minimal maintenance.
On-premise PBX means you run the phone system hardware in your own office. This gives you more control and can be more cost-effective at scale (100+ users), but requires technical knowledge to maintain or a support contract.
For most small businesses, hosted VoIP is the right starting point. You can always migrate to on-premise later if your needs grow.
Key Features to Look For
- Auto-attendant — Routes callers to the right person or department without a receptionist
- Voicemail-to-email — Transcribes or forwards voicemails so you never miss a message
- Call forwarding and failover — Sends calls to cell or mobile phones if someone is unreachable
- Conference calling — Built-in multi-party calls
- Call recording — Useful for training, compliance, and dispute resolution
- Scalability — Can you add extensions without replacing hardware?
What About Internet Bandwidth?
VoIP uses roughly 100 kbps per concurrent call. If you have 10 people who might be on the phone at the same time, you need at least 1 Mbps of dedicated upload bandwidth just for voice. Most modern broadband connections handle this easily, but if you are on a shared connection with heavy data use, quality can suffer.
A good provider will help you assess whether your current connection is sufficient or whether you need a dedicated line or QoS (Quality of Service) configuration on your router.
Costs to Expect
Hosted VoIP typically costs between £8–£25 per user per month in the UK, or $15–$35 per user in the US. This usually includes the phone number, voicemail, and basic features. Hardware handsets range from £50–£200 each, though many businesses use softphone apps on computers and mobiles instead.
On-premise systems have higher upfront costs (server hardware, licences) but lower ongoing fees. The break-even point is usually around 2–3 years for businesses with 50+ users.
Common Mistakes
- Not testing with your actual internet connection — Always run a trial period before committing
- Ignoring failover — What happens if your internet goes down? Good systems route to mobiles automatically
- Overbuying features — Start with what you need now; most providers let you add features later
- Locking into long contracts — Prefer monthly or annual terms until you are confident in the service
Need Help Deciding?
We have designed and deployed VoIP systems for organisations ranging from 5 extensions to over 20,000. Whether you need a quick recommendation or a full design and migration, we can help.
Learn more about our telephony services →