VoIP buying guide for small business

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VoIP Positives

What makes VoIP so attractive for businesses?

The low cost of VoIP is its biggest attraction. Business VoIP services are significantly less expensive than traditional phone services. You have much less hardware to buy or lease; in fact, many hosted services require no new hardware investment at all. If you do need hardware, it’s typically based on standardized technologies such as SIP, as opposed to proprietary products that tie you to a particular service provider. Monthly subscription fees are lower, as well. Verizon Small Business plans with unlimited nationwide calling, for example, start at just $63.50 per line, while Vocalocity offers the same unlimited calling with even more features for $40 per line. VoIP services also tend to be contract-free.

VoIP is cheaper than a traditional landline if you have staff in far-flung locations. Since in-network calls travel exclusively over data networks and don't need to hit the public phone lines, most VoIP providers let you make calls to your coworkers for free, even if you're in New York and they're in San Francisco. Don't worry, do-it-yourselfers: IP-PBX servers can handle remote employees as well.

Many hosted VoIP providers offer mobile apps that let you make and receive calls from the road using your data connection. Usually you can adjust the apps to ring simultaneously with your office phone or to act as a stand-alone extension.

Scalability is another boon. Rather than having to invest in costly new hardware, adding new extensions to a VoIP network is typically as easy as connecting your SIP-enabled phone to the network and tinkering with some software settings—and if you use a phone that's certified for use with your provider or software, it could be as simple as plug and play.

Most VoIP providers and IP-PBX software packages deliver a much more robust feature set than traditional phone providers do. All the basics you'd expect are present—including conference calling, voicemail, Internet faxing, and caller ID—but VoIP services also often supply virtual receptionists and greeting functionality, customizable advanced call screening and forwarding rules, integration with office software, and the ability to forward voicemail to your email or your mobile phone. Many providers offer these advanced features as part of a subscription; even when you must pay extra, the cost is usually less than you would pay a traditional phone provider for the same services.

If you need only a single line and want cheap calling, but don’t require all the bells and whistles associated with a business line, you might be able to get by with a residential VoIP plan, which you can find for as little as $5 per month for unlimited nationwide calling. Be aware, however, that the terms of use for consumer-focused plans typically forbid using the line for commercial activities. Most providers also have stringent fair-use policies, so you might run into trouble if your residential line rings off the hook day in and day out.

VoIP Negatives

VoIP’s most significant drawback is that if your Internet service or your power goes out, so does your VoIP service. Hosted services skirt around this issue by bumping incoming calls to voicemail automatically, or by rerouting calls to your mobile phone, in the event of a service disruption; but that doesn't change the fact that you won't be able to make or receive calls from your office phones in such a situation.

Another disadvantage involves emergency calling: Many VoIP providers don't offer 911 service, and the ones that do tend to charge extra for it or impose high base-subscription fees. This problem and the risk of a service disruption are the two main reasons why most providers suggest retaining a basic, traditional phone line to augment your VoIP service.

Most VoIP services offer unlimited calling in the United States and Canada, but connecting to mobile phones or special lines (such as free conference-call services) might incur an extra charge. Reaching foreign locales can be iffy at times, especially if you're calling a less-prominent country. On the plus side, the per-minute rates tend to be very competitive. If you make international calls on a frequent basis, you should read the fine print before subscribing to any service.

Finally, although VoIP voice quality typically rivals that of a landline or a good mobile phone connection, your network quality can seriously affect call quality. If you have a slow, spotty, or crowded network, audio quality can suffer greatly—or even drop out in a worst-case scenario.

Next Page: VoIP Service Comparisons