Understanding Small Business Phone Systems | Aircall Blog

Understanding Small Business Phone Systems

Understand small business phone systems and choose the right one.
Daniel Weiss

The right small business phone system makes life at work better and easier for everyone in the company. The market offers many different configurations of small business phone systems and they have more features and capabilities than ever before. Many businesses are still running on traditional phone systems and believe they don’t have a good reason to change.

These days, it’s common for businesses to run on Internet Protocol (IP) networks. These systems are used to connect employees and devices. Many companies are now switching over to VoIP phone systems and cloud-based phone systems for the same ubiquitous nature and versatility.

If you’re considering purchasing or updating a small business phone system, it’s advantageous to understand small business phone systems, especially the differences between hard and soft phones. Among the considerations, you’ll need to think about the costs, features, and your needs for inbound and outbound calling.

What Is a Small Business Phone System?

Many office phone systems are designed for large companies that have large numbers of employees working in multiple locations. Small businesses, however, often lack the budget or infrastructure for enterprise phone systems; yet, they still need to have a phone system that gives them the ability to communicate consistently with their partners, vendors, and customers.

To find the right features and options for your small business phone system, it helps to have a basic understanding of how different types of phone systems work.

A small business phone system is a set of office telephones that are interconnected and provide advanced features like call handling, call transferring, conference calling, and voicemail inboxes. Small business phone systems may consist of a few office telephones, as well as a PBX system that has a certain number of outside lines. A small business phone system is right for your company if you need to handle more calls. By getting the right system, you’ll also be able to support more sophisticated equipment and scale up as your business grows. The right small business phone system will help you achieve your business goals.

Small business phones can operate over a public switched telephone network (PSTN), or over the internet using VoIP. Some small business phone systems function by using a combination of these systems.

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Businesses have two types of small business phone systems to choose from including analog and digital systems, which work in very different ways. Analog systems are pretty straightforward. In simple terms, these legacy phone systems send electric signals through copper wires to the phone system. Digital phone systems operate by sending signals as “packets” of voice data over the internet and receiving them using specific software.

Cloud-Based Phones vs. Hard Phones: What to Know

To take the confusion out of understanding phone systems, let’s take a look at the differences between cloud-based phone systems and hard phone systems. Some of the things to consider when comparing cloud vs. hard phones are:

  • Call experience
  • Reliability
  • Security
  • Cost installation time
  • Scalability
  • Features and options that respond to business needs and functions

Cloud-based phones, or softphones, use software that’s installed on devices like computers, mobile devices, laptops, and tablets to place calls over the internet using VoIP. Softphones bring up customer information and access to other features on the user’s device screen. They also have features that are built into the app like microphones and cameras.

Hard phones typically refer to traditional office phones. They usually operate using PBX setups and local lines, but can also dial out over an IP network if designed to do so. Hard phones typically lack the easy integrations and flexibility of cloud based phones, but are seen by many as being more reliable in terms of call quality, since they don’t rely on an internet connection to operate. 

What are some of the other differences between cloud-based phones and hard phones?

Hard phones for small business

  • Uptime advantages (not reliant on internet access)
  • Consistent user experience
  • More expensive
  • Users need to be in the office to use them
  • Requires a physical phone at each desk
  • Run on a separate network than other internet-based platforms
  • Security measures must be applied in-house

Soft phones or cloud-based phones for small business

  • Potential for lesser call quality when applications compete for internet bandwidth
  • Less expensive–They don’t require purchasing extra equipment
  • Allows employees to work away from the office
  • Requires installing an application on an existing infrastructure
  • Has the capability to function for distributed teams and remote teams
  • Security handled by software company

Important Small Business Phone System Features

Your small business phone system is a critical tool to advance your company’s mission and business development plan. When looking at the available features of phone systems, it’s wise to be forward-thinking and consider which of them will fulfill your current needs and take your company into the future without breaking your budget. If the sheer amount of options and features are overwhelming you, it’s a good strategy to cover the basics first, and then weigh the benefits and costs of additional features.

  • Remote work compatible
  • IVR menu capabilities
  • Automatic Sales Dialing (ex Power Dialer)
  • Mobile phone compatible
  • Integrations with CRMs and other business tools
  • Personalized Voicemail
  • Caller ID
  • Conference calling and call whispering
  • Note-taking and sharing features
  • Microphone muting
  • Custom music for hold or messages
  • Headset compatibility
  • Call recording accessibility
  • Speed dialing/redial
  • Warranties and remote support
  • Call forwarding

Advanced technology makes it possible to offer an interactive voice response system, or IVR, as a means of self-service for your customers. IVR systems are right for some companies to reduce call volumes for issues that correspond to routine tasks. This type of system makes it possible to reserve call representatives’ time for handling more complex customer issues. 

Once you’ve made your final choices of phone system features, you can work on training your call representative to use them to their maximum capability.

Evaluating Business Phone Systems

The business needs of a phone service vary significantly from one business to another. Small business phone systems don’t come in one-size-fits-all capability. VoIP technology has evolved, giving businesses lots of options to choose from and giving them the benefit of being able to customize the perfect phone system for their business.

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A sensible approach to evaluating small business phone systems is to consider the issues of reliability, usability, availability, cost, scalability, and vendor reputation, in addition to the features you need for your business.


Inquire if the vendor can give you an idea of the anticipated failure rate. This is an important factor because you don’t want to be the first to find out that you have a vendor that’s new to the market and the system hasn’t been thoroughly field-tested. 


A demonstration of the system will help you to see exactly how the system works. In particular, your users will have valuable feedback about how they think it will work for them.


Ask about what kind of downtime you can anticipate, as well as the contributing factors and how the company will mitigate them. Inquire about any SLAs to ensure quality. 


What are the “all-in” costs of hardware and software. Consider outbound-dialing-minute costs, long-distance, and additional numbers/lines when inquiring.


The demonstration stage of the sale is the best time to ask about the capability of the system to scale up or down according to future business needs. Go over the potential cost increases and decreases depending on usage. In addition to calculating system costs, forecast things like training costs, network costs, and utilities.

Vendor Reputation and References

Your small business phone system is an investment, so it’s important to consider the reputation of the vendor. Your industry partners and associates may have valuable feedback about the experience and financial strength of various vendors.


Learn more about how the system was designed. Does it work out of the box without needing additional technology to operate correctly?

Inbound vs. Outbound Calling for a Small Business

Inbound calling and outbound calling refer to the types of support that your call agents make to your customers or others. Here’s quick look at what separates the two. 

Inbound Calling 

  • The traditional approach for telephone customer services.
  • Refers to the practice of customers calling into your business with an inquiry or service request.
  • Provides a single point of contact for all their service questions, payments, and ordering.
  • Call representatives need to have product and technical knowledge to answer the caller or know which specialist they can transfer the call to.

Outbound Calling

  • It’s a proactive approach to customer service.
  • Customer service representatives contact customers for follow-up.
  • Provides opportunities to notify customers of new products or changes in policy.
  • Call center representatives can make outbound calls during quiet periods to improve productivity.
  • Continued contact strengthens customer relationships and improves the customer experience.
  • Demonstrates your commitment to the quality of service.

By providing one phone number to handle customer inquiries, your customers can have any of their questions answered with one call. Most customers appreciate being able to get an appropriate response quickly and with little or no hassle. 

A small business phone system is efficient because it allows you to answer calls quickly and keep your customers’ waiting times short. It also allows you to plan for phone coverage for peak times and make good use of quieter times, as incoming call volumes vary significantly based on the day of the week and time of day. The analytics that a cloud-based phone system like Aircall offers will assist you greatly with matching staffing levels to your call volumes. 

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