Even in the age of email, messaging, and live chat, every small business needs a reliable phone system. Unfortunately, traditional business phone systems can be an expensive undertaking that many small businesses can’t afford. Consequently, many businesses are switching to Voice over Internet Protocol (VoIP) technology as an alternative to traditional phone lines.
What is VoIP, and How is it Different?
VoIP is a technology that transmits your phone calls as data over the Internet, rather than using traditional phone lines. In comparison, classic landlines use copper wires and a physical network of cables and switchboxes to create a dedicated connection between you and the person you’re calling.
To illustrate the difference, let’s think back to the early days of the telephone. Every phone had its own copper wiring running to the local telephone exchange. That exchange was, in turn, connected to exchanges across the country. Prior to the 1960’s, when you made a call a live operator would manually plug in electrical cords to establish a constant circuit between you and your recipient.During the call, you were essentially renting those copper wires, and no one else could use them. If you were making a long distance call, multiple operators in different cities would need to rout your call to create that dedicated connection (hence why it was so expensive!). While today’s phone system has replaced live operators with automatic exchanges, the basic technology hasn’t changed much in the last century.
VoIP technology, on the other hand, doesn’t rely on a constant connection between the two phones. Instead, it breaks the phone call into a series of digital packages and uses your existing Internet connection to transmit them over the least congested and cheapest routes possible. When the packets get to their destination, the digital signal is decoded back into voice, so the recipient can hear you.
VoIP is inherently more efficient for multiple reasons. First, during a phone call, normally only one person is talking at once, and there are plenty of breaks where neither person is talking at all (like those awkward pauses). Traditional landlines will transmit everything, even silence. VoIP will only transmit the bits where someone is actually talking, which means they’re saving a lot of data. Secondly, since VoIP doesn’t require a dedicated connection, multiple conversations can use the same digital pathway at once.
Advantages of a VoIP phone system
While VoIP is clearly a more advanced technology, what does that mean for small businesses who are considering making the switch from landlines? Let’s look at some of the key advantages.
Perhaps the biggest benefit of VoIP vs landline is cost savings. VoIP uses your existing broadband Internet connection, rather than dedicated telephone lines. Not only does that save you from paying fees to the phone company, it also means you don’t have to run wiring for two different systems in your office. You probably already have Internet access set up, making a VoIP system quicker and easier to install than a traditional phone line.
The newer technology also makes it cheaper to make long distance or international calls (because you’re not renting 1000’s of miles worth of copper wire). Plus, it’s simple to add, remove, or change phone extensions. With the latest advances in cloud technology, you can even host your VoIP phone service remotely without any worry about maintenance or complicated hardware.
A recent article from FitSmallBusiness quoted current phone system costs, and revealed that VoIP costs of $32.95/month for 1-4 users versus $563.27/month for five landlines.
With VoIP, you can answer your office phone line from anywhere you have an Internet connection. So if you have employees working from home or out on the road, they can answer their normal extension, just as if they were at the office.
Additionally, many VoIP also have a mobile app, so even your cell phone can become your desk phone. Calls into your desk phone will ring simultaneously on your cell, so your customers don’t have to play “phone tag,” guessing which of your numbers they should call.
Landlines only do one thing: phone calls. VoIP systems can do a lot more. First, you don’t have to be glued to your desk with a traditional handset and cords. You can be hands-free with a wireless computer headset and microphone, or use your cell phone if you’re on the road.
Because they work by transmitting data, VoIP systems can also carry other data besides voice – things like text and video. This means you can use your VoIP system for teleconferencing, or get faxes and voicemails delivered directly to your email. If you want to get really fancy, VoIP can also integrate with Outlook or your CRM to record calls and even place calls directly from your address book (so no more fishing through that Rolodex).
Disadvantages of VoIP
While VoIP is a popular and fast-growing option for small business phones, it still has its downsides.
Bad Internet Connection = Poor Call Quality
VoIP uses the Internet to transmit your call, so you need a fast, stable connection for it to work well. When it first started, VoIP was largely ignored because it was known for unreliable service and poor call quality. As Internet speeds have become faster and more reliable over the years, VoIP has improved greatly and is now often just as good as landlines.
Still, landlines are an established system that is incredibly reliable. Especially if your business is in a remote area where you don’t have good Internet service, you may still want a traditional phone system.
No Power = No Phone
Traditional phones are some of the simplest technology we use – so simple you can create your own telephone network with two phones, a 9-volt battery, and a resistor. Landlines require so little electricity that they get it directly from the phone wires and will still work, even when the power goes out.
Not so much for VoIP. When there’s a power outage, that means there’s no Internet, and no Internet means no VoIP phone. So in the event of an emergency, you might not be able to reach 911. You can still use your cell phone and cellular data, but it won’t be as reliable. Also, VoIP phones are not as easy to trace, so emergency services may have more difficulty locating you.
Consequently, even business who switch to VoIP sometimes maintain a single traditional phone line, just in case of emergencies.
So is VoIP Good for Your Small Business?
While VoIP does have a few drawbacks, the positives greatly outweigh the negatives. VoIP offers a cost-saving alternative to small businesses who need professional phone service but can’t afford a traditional business phone system.
Landlines are still often considered the more reliable choice. That may be true if you can’t get a good Internet connection. Consider this though: landlines are an obsolete technology, which have remained stagnant for decades, while VoIP is constantly improving. Personally, our bet’s on VoIP. If you’d like to explore how to install a VoIP phone system for your business, give us a call, or send us a message!