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 connection.

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 divert etc.

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 for you.

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 connection.

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 VoIP.

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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