Business Phone Systems 101

December 18, 2021
Business Phone Systems 101 - Featured Image

In Business Phone Systems 101 we will talk about how business phone systems aid small and large companies in handling their incoming and outgoing calls. We will tackle special features that set business and residential phone systems apart. No matter the size of your business, there is a business phone system that is suited for you.

Let’s get started!

types of business phone systems

What are the types of business phone systems?

Good business phone systems are able to handle several calls at once and can move calls within an organization. Here in Business Phone Systems 101, we will discuss the three basic types of business telephone systems: KSU, PBX, and VoIP. Let’s take a look.

Key System Units

Key system units (KSU) is the most basic phone system. It uses a central switching device to identify the proper phone-line selection. KSU has a limited number of phone lines; it can only connect up to 40 employees. Therefore, this system is only suitable for small businesses.

KSU devices are very similar to a home telephone but have all the essential features a business will need. Due to this it also lacks mobility and flexibility. A variation of this, the KSU-less system, has the same features. Removing the central switching unit from the equation, it is completely wireless and is mobile and flexible.

However, a KSU-less system can have some serious drawbacks. KSU-less systems are not sold commercially and must be specifically requested from a phone service provider.  It only supports up to 10 phone operators, making it less than ideal for small businesses that have plans to expand. A KSU-less system is best suited for businesses that don’t intend to grow their workforce.

Pros and cons of a KSU

Related: Analog phone system


Private Branch Exchange

Private Branch Exchange (PBX) is another phone system option. It is more advanced than KSU and KSU-less systems. Through the use of programmable switching devices, it can automatically route incoming calls. Since a PBX system has its own power supply, it can still be used even when there is no electricity.

A modified version of this is the hosted PBX. Hosted PBX, contrary to traditional PBX, is not hosted on the premises.  It is hosted by a telephone provider instead. Maintenance and installation costs are cut short with all of the features of traditional PBX intact. Since most PBX features are automated, this phone system is best for companies with 40 or more employees.

Pros and cons of PBX

Voice over Internet Protocol

The last type of phone system we will discuss is Voice over Internet Protocol (VoIP). VoIP requires the use of both the internet and a computer. All of its features can be accessed through the computer via the company’s business internet network. By allowing prospective clients to communicate even when in two different countries it is the most advanced system of the three.

The downside of this is that VoIP is also the most expensive system and costs are determined by the number of employees that would use it. Luckily, like PBX, VoIP systems can be hosted. This hosted version offers the same features as the basic VoIP system with lower installation and maintenance costs.

Pros and cons of VOIP

Further reading: VoIP phones


What is the average cost of a business phone

What is the average cost of a business phone?

Leading business phone systems charge about $12 to $20 per month. An example is 8×8 and Ooma Office. The 8×8 plan charges users $12/month while Ooma Office has a plan that starts at $19.99/month.

This, of course, can vary from business to business. Numerous factors affect the cost of business phone lines. Depending on the specific, these factors can have a small or a large impact. For small businesses, the number of each new phone line is a new addition to the monthly cost. Larger businesses can combat this by opting for bundled options.

It is all-important to take into account that the type of phone service to which you subscribe matters. Traditional landlines have different costs than VoIP services. Additional features such as teleconferencing, video conferencing, storing messages or other popular features will affect the price of each line or each user. Answering services, mobility services, and extra support can also add to this cost.


How do businesses use phone systems

How do businesses use phone systems?

Office telephony is used by different industries and businesses in multiple ways. Here are a few examples:

  1.   It delivers great customer service.

Using a business phone system increases the standard of service the customer receives. Phone systems connect businesses to consumers and investors alike. Consumer-centered strategies give companies a competitive edge. This is why businesses of all sizes subscribe to a business phone system.

An enterprise directory is an example of the advantages phone systems can provide. This feature allows employees to inform other agents when a question isn’t in the scope of their field. Presence status is also helpful for small businesses because it can speed up the process of finding appropriate agents. This boost in speed and efficiency results in improved customer service and reduced pressure on employees.

Check out our other article: Customer Service Process Flow

  1.   It grows with your customers.

Small businesses benefit from phone systems because of their scalability. Adapting proper business tactics and providing excellent customer service, when combined with other strategies, ensures that your business will grow. This means you will receive more calls, inquiries, and messages. This is where systems like the cloud phone system can prove useful.

Expansion can also be in the form of a larger business directory to accommodate new customers, new investors, or new employees. Business phone systems can also be used to ensure proper communication between you and your staff. Since growth comes with great pressure it is important to not only know the demands of the market but also the needs of your employees. Providing a means to work outside of the office also offers your company more flexibility.

Read More: Why is Call Flow Important

  1.   It decreases pressure on you and your employees.

Business phone systems decrease the pressure on you and your employees by automatically routing calls and allowing communication whenever, wherever. A business phone system usually comes with the support of a vendor, so you only have to train your people in basic troubleshooting. It also eliminates the need to hire a trustworthy IT technician.

Auto-attendant or queue is a very useful feature of a business phone system. These features allow your employees to confidently handle calls and ensure the accuracy of the information they tell your callers. This also helps remove human error in the equation.

  1.   It streamlines workflow.

With the help of business phone systems, companies can easily streamline their workflow. The streamlined workflow means a productive and efficient workforce. It not only lessens the pressure on you and your employees but also eliminates unnecessary nuisance when applying changes.

Streamlining helps you understand what your business needs. This makes it easier to find areas to improve in your business.

Don’t miss out on our other article: Why is Call Flow Important


What are the main features of a business phone

What are the main features of a business phone?

The main features of a business phone include the following features:

  • Multiple lines: With multiple lines, employees can switch between calls. This helps in call management during times of high traffic. Your business size determines the number of lines you need. Small businesses usually only need two to four lines.
  • Auto-attendant: Automated attendants welcome the caller and route them to the appropriate channel. It is a feature provided by automated answering services.
  • Visual voicemail: In business phone systems, this feature does more than just store recorded messages. It can transcribe voicemails and send them to employees via text or email.
  • Conference calls: This is a necessary feature for organizations that have remote employees. By scheduling meetings on the phone, remote employees can participate in the conference call.
  • Call forwarding: This feature allows calls to be transferred to another number or even to an email address.
  • On-hold messages: This allows a staff person at your business to record messages that let a caller know that they’re on hold. Additionally, music can be played when callers are on hold.
  • Handset support: Modern business phone systems are compatible with wired and wireless headsets.
  • Automatic Call Distributor: ACD system works by answering and distributing calls to the proper terminals or agents.


How do I set up a small business phone system

How do I set up a small business phone system?

Here at Business Phones Systems 101 we don’t just give you an idea about phone systems; we also walk you through its process:

Step 1: Activate your service

After activating your business phone, you will receive a welcome e-mail and a link to our quick setup wizard. Afterward, you’ll be able to:

  • Create a password for your account
  • Choose a security question and answer
  • Enter information about your company
  •  Set your time zones, service address, and users
  • Arrange a virtual-receptionist
  • Use call-groups
  • Allocate members and extensions
  • Customize rules for call handling
  • Add custom greetings

Subsequently, you can download the RingCentral Softphone mobile app which will let you manage your business phone calls on your desktop apps.


For the best call quality, it is recommended to use a Quality of Service (QoS) enabled router.

Step 2. Set up IP phones

The next step is to set up IP desk phones. If you prefer having them, that is.

  1.     Using the cord provided, attach your handset to the base of your IP phone.
  2.     Attach your Ethernet cable into your router or internet jack
  3.     Plug the other end of your Ethernet cable into your phone’s WAN port


If it’s not possible to connect to your router or internet jack, you can directly connect your IP phone to your PC.

Related reading: How to Connect Phone to Ethernet

Step 3: Transfer your existing toll-free number

Temporary business numbers are provided after you purchase your business phone. If you want to keep a toll-free or a vanity number, you can transfer this to your new business phone. For each new number you add to your business phone you are required to complete an online wizard.

Step 4: Customize your phone system

Businesses are different from each other. You can personalize your business phone and modify it according to your business needs. Depending on the provider, administrators can access and change phone system extensions and adjust system settings. Additionally, each user is able to change voicemail greetings, hold music, and individual extension call handling rules.

Step 5: Add any international numbers as required

The majority of business phones are flexible. Should the need to add international numbers to your business phone arise, you can buy a license for your international employees and select a preferred number and activation key. With this, you’ll have inclusive call minutes for international inbound and outbound calls. You’ll also be able to purchase international numbers to use as a caller ID.


How does a PBX system work

How does a PBX system work?

A PBX phone system has three different variations namely: analog, digital and cloud-hosted. An analog PBX or landline system uses a public switched telephone network (PTSN), this type of PBX is becoming rarer. Digital PBX can offer more features at a low cost because it uses bandwidth and is run on an internet connection. Later in this post, we will explore the features of a cloud-hosted PBX.

There are different types of PBX systems. These individual systems work differently from each other. Traditional PBX systems use copper-wired telephone landlines to facilitate inbound and outbound calls. Modern PBX systems use VoIP or digital lines that can be used alongside analog lines. Analog PBX or landline systems use copper phone lines that connect to a PBX box within the office to facilitate on-premise phone systems. Telephony switches are then used by the PBX box to enable the routing of incoming calls to phones within the premises.

Traditional PBX systems have a set number of internal extensions and outside trunk lines. However, IP business communication system users can have unlimited access to extensions and trunks. This makes IP PBX systems a better choice for businesses in need of flexibility and scalability.

Want to learn more about VoLTE? Check out our article: How Does VoLTE Work?


what is cloud PBX

What is a Cloud PBX?

A cloud PBX works entirely on an internet connection. Instead of running on a server, it is maintained solely in the cloud. It’s a virtual phone system that provides and offers a reliable and secure phone system over the internet. Other names for Cloud PBX include hosted PBX, virtual PBX, VoIP PBX, Online phone systems, and VoIP phones. Users of a cloud-based PBX benefit from its intuitive functionality.

How should you upgrade your phone system?

Generally, business phone systems are upgraded every two years. This practice ensures that the business phone system is up-to-date. It also prevents maintenance problems that could arise in mobile phones. This cycle can be expensive.  Here are two ways to determine when it’s time for an upgrade:

  1. Functionality – You don’t need to upgrade if your phones are working just fine. Until a consistent or persistent problem develops, you can keep your phone system. Doing this can slow the average upgrade time up to every five years.
  2. Feature – This means upgrading when a good feature appears that would significantly improve your business operations. For example, the upgrade from phones to smartphones offers many productivity benefits and was adopted by the majority of businesses. Similarly, switching to 4G from 3G had a huge advantage. Today, upgrading to 5G can be beneficial to plenty of businesses. Major upgrades that give an obvious return on investment should be taken into consideration.


Business Phone Systems 101 - Summary


Now that you know all about Business Phone Systems 101, you can decide what type of business phone system would work best for you and your business. Depending on your needs, budget, and the size of your business, you can determine what type of service best suits you. All that’s left now is to get in touch with your local service provider to talk about installation, cost, and maintenance.

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