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Written by
Katy Ratican
3 May 2023
20 minutes

Business phone systems made super simple: Everything you need to know

The complete guide to business phone systems that will help you choose the right phone for your business
Business phone system

Searching for a business phone system? It can be confusing with all the options out there. The telecommunications sector is rapidly evolving and you don’t want to be stuck with a legacy system that won’t serve your business needs.

What you need is a modern business phone system that will help you optimise your communication and grow your business. In this complete guide to business phone systems, we explain what they are, why you need them, the different technologies you can choose from, the features you should look for and how your business can benefit from choosing the right one.


What is a business phone system?
Do business phone systems mean devices?

The different types of business phone systems

Why do you need a business phone system?

What business phone system should you choose?

On-premise or cloud-hosted: Which is better for your business?

Business phone systems: Features to look for

The benefits of a business phone system

How do you select your business phone system provider?

The cost of business phone systems

A business phone system or a business phone number?

Business phone system glossary for beginners

Chalkboard: A reliable business phone system for growing businesses

Let's start with the obvious question…

What is a business phone system?

A business phone system is a dedicated line of communication for you to seamlessly interact with your customers and colleagues. You will have noticed that we’ve been referring to it as a business phone ‘system’ and there’s a reason for that.

Why is it called a phone system? Business phone systems have other communication features that enable businesses to efficiently communicate with all their stakeholders. Along with the basic call functionality, modern business phone systems come with additional features for business communication including auto-reply, call waiting, call forwarding, to name just a few.

That’s why you hardly hear people talking about their personal phone ‘systems.’ For personal use, you need a limited set of features. More importantly, there’s little to lose if you don’t have any of those added functionalities. But with business phone systems, you need a combination of features that meet your requirements.

Do business phone systems mean devices?

Traditionally, business phone systems meant devices. These included everything from conventional landlines to mobile phones. So, when someone said they were getting a new business phone system, they meant that they were getting a new device and the associated hardware.

Not anymore. Business phone systems are now much more than just devices. They are communication systems that you can easily incorporate into your existing infrastructure. The most advanced among these solutions is VoIP or Voice over Internet Protocol technology phones that work over the internet and don’t require specific devices.

So, if you’re looking for a business phone system, particularly if you’re a small business or startup, you don’t have to worry about spending on additional devices or hardware. Just like an email or instant messaging app, you can get a new solution and use it on your existing device.

The different types of business phone systems

Whether you’re an established business looking to upgrade or a freelancer looking for a business phone system, your three main options are a multi-line phone system, PBX phone system and VoIP phone system.

Multi-line phone system

With a multi-line phone system, you can handle two or more calls at the same time. It has multiple lines running through the same system, enabling you to answer phone calls individually or send them to voicemail. You can also put calls on hold, dial external or internal numbers and then return to the line.

Single-line phone systems can be limiting since they will only have one number assigned to them. When another call comes in, the caller will get a busy signal or be directed to voicemail. As businesses grow and teams expand, single lines will slow down the system and weaken customer service.

Multi-line phone systems overcome the limitations of single-line phone systems. Now customers don’t have to stay on hold and team members don’t have to wait for someone else to finish their calls.

Before getting a multi-line phone system, you should calculate how many users it would cater to. Small businesses and freelancers shouldn’t get advanced systems and needlessly pay extra when they won’t use multiple lines.

There are several devices that enable multi-line phone systems. These include 2-line phones, 4-line phones, and 6-12 line phones. If you’re a solopreneur, a 2-line phone is most likely to be enough for you. If you’re a small business with a customer service team, a 4-line phone should meet your requirements.

PBX phone system

A Private Branch Exchange or PBX phone system gives you a private network for your office. The ideal solution for medium or large enterprises, PBX systems allow you to switch calls between internal users while enabling them to use a specific number of external lines.

Beyond routing incoming and outgoing calls through the office network, a PBX system will also give you additional features such as call routing to extensions, call holding and conference calls. There are two kinds of PBX systems: on-premise and hosted PBX.

The on-premise or traditional PBX is hosted on the premises of the business. This requires significant initial investment and maintenance. All communications in the system happen through conventional phones. While it’s more stable and gives the business greater control over the system itself, an on-premise solution generally lacks flexibility and can be cumbersome to manage.

Hosted or cloud PBX is a cloud-hosted solution. There’s no need to buy and install expensive hardware. This not only reduces costs but also avoids clutter on the premises. You can place and receive multiple calls and since there’s an uninterrupted power supply, a hosted PBX system is more reliable.

These systems are also more remote-friendly than on-premise solutions. But if you’re a small business or startup, even a cloud PBX can be needlessly complex to manage.

VoIP phone system

Of all the telephone technologies that businesses can use, VoIP is the most modern option. VoIP enables users to make and receive calls over the internet. As opposed to PBX, there’s no need to invest in hardware or take care of its maintenance.

The technology works by converting voice into data packets and transferring them over the internet. These are then unpacked at the receiver’s end. Since it’s based in the cloud, these are also referred to as cloud or softphones.

One of the biggest advantages of VoIP is that it’s exceptionally easy to deploy. By downloading the app and signing up for a VoIP service, you will have a new number in minutes. VoIP phone providers have easy-to-use interfaces that allow you to add and remove members.

VoIP phone systems are particularly useful for distributed teams. Anyone can use the phone as long as there’s an internet connection. Importantly, there’s no need to buy separate devices. All these translate to significant cost savings, making VoIP the ideal choice among small business phone systems.

VoIP calls are encrypted, which assures the security of your phone system. These phone systems also come with business-friendly tools including auto-reply, contact organisation, call forwarding, queueing and number sharing, to mention a few.

Why do you need a business phone system?

If you’re wondering whether you need a dedicated business phone system, the answer is yes. It’s true that now there are multiple channels for people to communicate but even in an age of instant messaging apps and video conferencing and emails, the phone has retained its importance for the following reasons:

It’s immediate. If a customer is on their way and has to find your office, they won’t email you. If a vendor has to drop supplies at your business, they won’t visit your website. They will call you because it gets an immediate response.

And speed means money. When clients hear from you immediately, they’re more likely to take you seriously. When customers can talk to you directly, their issues will get resolved more quickly. Faster client acquisition and better customer service are two of the foundations of business growth.

It’s professional. Picture this: A potential customer calls you, only for their call to be put on hold because you’re using the line for a personal call. What’s worse, when you finally get off your call, you may not know who called you because it’s the only number you use.

A business phone system makes your business look professional. Any business that has taken the time and effort to have a dedicated business number will appear credible as opposed to someone who uses the same number for both personal and business calls.

It’s direct. If somebody were to send your business an email, there’s no guarantee that it will be opened immediately or by the person it needs to be seen by. A social media enquiry might be lost among all the other comments or noticed by someone in the marketing agency. On the other hand, a phone call is a more direct form of communication.

The caller knows that they’re saving time and energy by talking directly to the business. If it’s a small business, in all likelihood, they will be talking to the person in charge. That helps you build trust in the minds of not just current but also potential customers.

What business phone system should you choose?

The business phone system you choose should serve your unique needs. The main criteria to keep in mind are:

  • The number of current employees

  • The number of existing customers

  • The number of locations

  • The markets you serve

  • Whether you use it for customer support

  • Whether you use it for marketing

  • How much you’re willing to invest

  • Whether you have on-site or remote employees

  • The features that your business needs the most

If you operate out of a single location and have just a couple of employees, a multi-line system might suit you. But your phone’s service will be limited to that location and it won’t give you any business tools.

If you’re a medium or large enterprise with on-site employees and a high number of incoming calls, you can go for a PBX system. Do keep in mind that this involves significant initial investments and regular maintenance. You will also need to train personnel to manage the systems – or invest in external engineers to maintain the system, thereby further driving up the cost.

If you’re a small business, startup or solopreneur, a VoIP system is your best bet. It gives you a dedicated line for work and offers business tools, all at an affordable cost. Plus, you don’t have to buy additional devices or hardware and there is no maintenance involved.

On-premise or cloud-hosted: Which is better for your business?

Most aspects of technology are moving to the cloud and with good reason. Any system that migrates to the cloud is easy to deploy and manage and is considerably more affordable than its traditional counterparts. The same is the case with business phone systems.

An on-premise system makes sense if you have the necessary budget, personnel and space for it. Since it’s located on your premises, you would have greater control over the system. But cloud-hosted systems offer several advantages that small businesses can’t afford to ignore.

When you get a cloud-hosted business phone system, you don’t have to worry about investing in and maintaining the hardware. For small businesses and startups, this can be a significant expense. A cloud-hosted system gives all the benefits of an on-premise system at a fraction of the cost.

One of the biggest advantages of cloud phones solution is that they widen the reach of your business phone system. Your employees could be in the office, at a client’s location or working from their homes but if they have a stable internet connection, they can stay connected. This agility makes hosted systems the ideal option for small businesses, startups and others with remote or hybrid employees.

Business phone systems: Features to look for

An important aspect of choosing a business phone system is figuring out the features that your business will need the most. What you need is a business phone that makes it easy to conduct your operations but is still within your budget. Make sure that you only pay for the features that you need for your current and expected staff strength.

When it comes to specific features, the most common ones are auto-reply, contact organisation, call waiting, routing, transfers and recording. VoIP phone providers will also give you texting capabilities, which will enhance your marketing and customer engagement.

You also need an easy-to-use dashboard that allows you to manage your business phone system. This is how you find out the details of your phone usage and add or remove features or users.

The benefits of a business phone system

By upgrading to a modern business phone system, you and your business will enjoy these four benefits.

Save money and time

Traditional phone systems are expensive, bulky and difficult to manage and maintain. With a new business phone system, especially a VoIP business phone, you don’t have to invest in devices or hardware. You can also get started immediately without waiting for installation.

When you upgrade to a new business phone system, you will also save on monthly charges since most VoIP providers have affordable subscription plans. This is especially true if you make long-distance or international calls.

Unify your business communication

Conventional phones are only one piece of the puzzle. Modern business phone systems not only simplify communication but also give you additional features that allow you to unify and better manage your communication. You get call forwarding, auto-reply, call queueing and recording, among others. Since these are in-built features, they will work well together to give you a cumulative picture of your business communication.

Through your dashboard, you can add or remove users and features, depending on your needs. Another big advantage of upgrading to a business phone system is the ecosystem of tools that you can easily integrate with your phone. There’s a world of project management and communication apps that you can use with your phone to streamline and improve your operations.

Stay connected wherever you are

Desk phones limit you to desks. Even with all the investments and maintenance, their utility is limited to your office premises. You will also need a mobile phone to stay connected when you’re out of the office, travelling or working from home. This means you need to give multiple numbers to your clients and colleagues.

VoIP business phone systems enable you to be mobile and agile. As long as there’s a stable internet connection, you will be able to not just make and receive calls but also read and send messages and documents. This flexibility improves productivity, reduces expenses and makes it easy to monitor customer service.

Appear more credible

Why do businesses need websites and official email IDs? Because those make them look professional. Similarly, a dedicated number for work makes your business appear credible to potential customers. With a business phone system, you can easily direct calls to the right individuals, use voicemail and auto-reply. All these convey your seriousness and commitment to customers.

Professionalism may not be a serious need for medium and large enterprises since they would have multiple offices and greater brand recall. But for small businesses, startups and freelancers, it’s of the utmost importance because it makes you look bigger. When you appear credible, people will be more eager to consider your product or service.

Separate your work and personal lives

If you use the same number for personal and business communication, you’re risking data breaches. Also, while it makes you more mobile, you could receive business calls when you’re with family or on vacation. This seriously compromises the time you will be spending with your loved ones.

With a modern business phone system, your personal information remains private. You can decide when your customers can get in touch with you. Top-rated VoIP providers also offer you number-sharing, which allows your team members to receive calls when you can’t. In a world of BYOD (bring your own device) VoIP numbers make it easy to safeguard data through a centralised management platform.

How do you select your business phone system provider?

These are the six main criteria you should keep in mind when selecting a business phone system provider. These are especially important for small businesses, solopreneurs and startups with limited budgets, personnel or IT expertise.


The foremost factor is how much you would pay for your business phone system. Along with the initial investments in hardware and devices, take into account your monthly bills for your entire team. VoIP phone systems are demonstrably more affordable for small businesses, especially if you make long-distance or international calls.


The essential features you will require include auto-reply, contact organisation, enhanced texting and broadcast SMS, among others. You should only pay for the features that you need. For example, while medium or large enterprises might need call centre solutions, small businesses don’t need these expensive add-ons.

Ease of use

The business phone system you choose should be easy to install and operate. You shouldn’t have to wait for technicians from your provider to set it up for you. This is where VoIP phone systems are exceptionally handy. Merely by downloading the app and registering for a subscription plan, you’ll be getting a second number on your phone.


As a small business, the last thing you want is to be tied to a long-term contract. Your business phone system provider should give you the flexibility to exit the service without any fees or fines. This is why it helps to choose a provider who will offer you a free trial.

Customer service

Since it’s a new system coming into your business, it’s reasonable to assume that you might have some concerns. After all, even the best-rated phone systems can sometimes run into problems. There will be significant interruptions to your business even if your phone lines are down for a couple of days. Your business phone system provider should have dedicated customer support that you can easily reach.


When selecting business phone system providers, there’s an often overlooked aspect; who is their target market? This can often turn out to be the most important factor when trying to choose a new system since a phone provider’s specialisation will reveal whether they’re the right fit for your business. If you’re a small business, your VoIP provider should have specific products, features and pricing suitable for small businesses.

The cost of business phone systems

If you were to get a PBX with just two lines and six handsets, it will cost you around £160. For larger businesses that need 16 lines and 64 handsets, the cost will be more than £900.

If you opt for hosted VoIP, you will have to spend up to £250 for configuration and installation. The VoIP phone software will depend on the number of users and could be anywhere from £20 to £800. The average cost of VoIP is usually around £10 per user per month.

Remember that the more complex your system, the more you will have to spend on installation, maintenance and training. You will also have to take care of other expenses such as energy charges that are required to run the system. Finally, if you overshoot your allotted minutes, there could be additional charges from your phone provider.

Depending on your business size, a PBX phone system could cost you between £160 and £1000. VoIP business phone systems cost between £30 and £800. As the comparison shows, VoIP phones are considerably cheaper than PBX systems.

A business phone system or a business phone number?

Until a few years ago, if you wanted a business phone, you had to get a business phone system. This meant that you had no option but to get the necessary devices and hardware and then manage their installation and maintenance. But not anymore.

With VoIP, you can get a new business number and all the features that you normally associate with advanced phone systems. It’s more cost-effective, feature-rich, easier to manage and suitable for remote and mobile teams. And if you’re looking for VoIP systems, you should focus on those built for small businesses.

Chalkboard: A reliable business phone system for growing businesses

Introducing a phone system that’s advanced, easy to use and affordable. Chalkboard gives you a second line for work that can become your dedicated number for business. This is how you separate your professional and personal lives and achieve a greater work-life balance.

You don’t need additional devices or hardware. All you have to do is download the app. In a few minutes, you will have your new number. Chalkboard allows you to share your number, which will enhance collaboration and customer service.

You can organise your contacts and send group broadcasts to share promotional offers or product information. With advanced chat, you can start conversational marketing with your customers. Auto-reply sends pre-written messages for calls that you might miss. No more missed calls and missed opportunities.

Download Chalkboard and start your free trial. It’s a business phone system designed for small businesses, freelancers and startups.

The ultimate business phone system glossary for beginners

Answering service: An outsourced service that manages business communication for small and independent businesses and entrepreneurs.

Auto-attendant: A virtual assistant that helps a caller to use the keypad or voice without having to seek the help of an agent or customer service representative.

Automatic call distributor (ACD): A system that accepts phone calls and directs them to the right distribution or destination. In customer care, for example, if the caller were to press a letter for a language, ACD will direct them to the appropriate extension.

Automatic number identification (ANI): This is how you identify the number of the person calling you.

Automatic speech recognition (ASR): This system allows callers to choose their options through voice instead of having to punch the numbers in. For example, it might ask you to “please say the name of the individual you would like to speak to.”

Call forwarding: This is how you can forward your incoming calls to another number either automatically, when the called line is busy or after a few rings.

Hosted or Virtual PBX: A call management system hosted in the cloud that greets callers and requests them to dial extensions as decided by the company.

Interactive voice response (IVR): It enables callers to press different options for specific results when they hear the voice command.

Live answer: When a real person answers the call live instead of the call going to voicemail or being handled by a robot.

Longest delay queue (LDQ): It refers to the longest time that a caller is forced to wait in the queue before they get connected or before they hang up.

Second-line app: An additional number that works over the internet. A second-line app will let you direct your calls to multiple numbers and enable you to receive the call from all connected devices.

Simultaneous ringing: When the incoming call rings at several phones simultaneously.

Unified communications: A consolidated communication management system covering phone, email, instant messaging, fax etc.

Voice over Internet Protocol (VoIP): These are internet-based phone services that don’t require going through a traditional phone service provider.

All information provided in this guide was believed to be correct at the time of publishing. However, please be aware of future changes.

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