The small business guide to VoIP
If you've heard people talk about VoIP (Voice over
IP) but you are not entirely clear what it is, or you've heard
people say you can save money with VoIP but you are a little
suspicious, this is the guide for you. Read on for a simple, quick
explanation of what VoIP is and how a VoIP phone system can help
you save money.
So here's the basic idea: You are a small business and you have
a broadband connection - VoIP allows you to run your phone systems
over your broadband connection.
In other words, you are running your Voice system over your
Internet Protocol connection. Think about it; you can watch video
and listen to the radio over the internet and the audio quality is
fine - so why can't you use your internet connection for your
telephone? Well the answer is, you can!
But I want to keep my telephone number
OK, this sounds good so far but you but you are running a
business and the big question is - can you keep your current
telephone number? Again, the answers is: Yes.
How it works
You sign up with a VoIP company, they will talk to BT (or
whoever you use) so that your numbers are transferred to them. Now
all incoming calls are directed to your VoIP company. Your VoIP
company sends all incoming calls down your broadband
You'll buy a VoIP router to plug into your broadband connection.
You plug your VoIP phones and your computers into your router and
that's it. All outgoing calls are sent up your broadband connection
and are connected to the phone network by your VoIP company.
Sounds a little too easy...
Well, that's the basic idea. In reality it is a little more
complicated, but only because you will probably want to buy a phone
system that has features such as voice mail, call waiting, call
So there are two options: you can buy a "VoIP ready" phone
system to stick in your office. Or you can rent an online service
from your VoIP company and they will host a virtual phone system
Having a system in your office gives you more control but means
a bit more hassle. Going to an online service means you just need
to buy handsets and then plug them in. But both ways, you'll be
routing your incoming and outgoing calls up your broadband
Phones shmones! What does this mean to you?
So what does this mean to you? Firstly, you stop renting a
landline. You only need one connection, that's your broadband
connection ... so no more landline rental. Your outgoing calls are
typically cheaper than traditional telephone providers - especially
if you make overseas calls. When you add it all together you would
expect to save about 40% on your telephone costs if you switch to
Also, VoIP gives you added flexibility. As VoIP just uses the
internet you can usually add or remove lines almost instantly. You
can also move office or work-from-home simply by plugging handsets
into the new location. It could not be more simple.
What are the downsides?
You will have to sign a contract with a VoIP company. The VoIP
company can use your current broadband connection but some VoIP
companies offer broadband as well. You also have to buy some VoIP
handsets and maybe a VoIP router.
Back of the envelope costs
With traditional telephony, the costs mount up - let's take an
average small business - you might have four phone lines - each
could be costing £150 per year. If you have a phone system on the
wall you could be paying £300 a year maintenance. So that's
annual bill of £900.
A VoIP system in contrast could cost you £250 - £500 to provide
all four staff with all the bells and whistles.
With traditional telephony, your call costs may not be the most
competitive and it is likely you are being caught by gotchas like
"setup costs" - a minimum call fee. VoIP providers tend to be more
aggressive on pricing (it's a tough old world out there in VoIP
land) and you could save around 10-25% on your calls.
Matt Kingswood is technical director of theITSolution. Visit his
website for more on VoIP: Phone Systems London
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