How Much Do Business Phone Systems Cost?

According to the Small Business Association, there were 30.2 million small businesses in the US in 2018. At that time, 99.9% of companies in the US fell into the category of small businesses. When you run a small business, you know how important it is to run your business effectively and efficiently. That’s why it’s important to understand what the best technology and strategies are that help you do this.

Business Phone System

If you don’t use the right technology or strategies, your business could end up failing. Because this is a common fate for many small businesses, you might be stressed, trying to figure out which technology, software, and strategies to invest in.

Get Quotes

When researching the best technologies you can invest in, you might have come across the option of investing in a business phone system. However, you might now know which type is best for you or what type you can afford.

That’s why we’ve put together this guide on business phone systems. Once you know which business phone system is best for your business, you’ll be able to run your business more successfully.

How Does a Small Business Phone System Work?

If you’re considering different phone systems for small businesses, you need to know how a small business phone system works. When you have a small business phone system, you have a system made up of multiple phones that are interconnected.

Phone System

As a result of the phones being in the same system, it’s easier for you to accomplish advanced telephone tasks and possibilities.

These advanced tasks and possibilities include having shared and private voicemail inboxes, call accounting, call metering, conference calling, call transferring, and call handling.

If your small business has grown recently and your call numbers have grown significantly, having a small business phone system can significantly simplify your communications within your company and with customers.

What Are the Types of Small Business Phone Systems?

There are four types of business phone systems. These are cloud-based, PBX, VoIP, and multi-line. Costs can vary, depending on the technology and the service provider. In this section, we’ll discuss each of these types in detail and provide information about cost.

That way, you'll also be able to save money.

Cloud-Based Phone System

When you’re using a cloud-based phone system, your communications infrastructure is all off-site instead of where your business is located. Different aspects of communications, such as signal processing and call routing, all occur remotely.

Voip Phones

In terms of cost, you pay a low monthly fee to your provider. If you have a small business that handles many calls—and you expect your business to grow significantly—then this is a good choice.

This is because, since everything off-site, you won’t have to make any changes to your business itself if it starts to grow. Instead, the cloud-based phone service provider will make all the needed changes on their end.

When you have a cloud-based phone system, it’s hosted on either a VoIP system or PBX system.

In addition to the system being off-site, other benefits of a cloud-based phone system are that it’s often more cost-effective, it’s scalable, and it’s hosted on a server that’s third-party.

This last benefit means that you aren’t doing any maintenance.

The hosting company handles everything for you. This means you can focus on running your business. The cost of this type of system is usually between $10 and $50 for each line.

Compare Quotes

PBX Phone System

“PBX” means “private branch exchange.” In layman’s terms, “PBX” means that you have a phone network in your office that’s private. So, when you’re using a PBX phone system for your small business, you’re managing it yourself and have private access to it.

Best Phone System

When it comes to small business phone systems, this is a good option if you want privacy and a technological solution that is centralized.

When a system is centralized, this is different than a traditional multi-line system, where processes occur through the phone unite.

The benefits of a system being centralized are that it’s more cost-effective, that it’s more flexible, and that it’s more scalable.

You’ll get many advanced features with a PBX phone system, such as conference calling, extension routing, and call holding.

If you work in an industry where you need these features, a PBX phone system might be right for you.

A PBX phone system will usually cost $1,000 for each user.

Compare Quotes

VoIP Phone System

A VoIP phone system is a popular choice for many small businesses. “VoIP” means “voice over Internet protocol.” Basically, this means that your telephone network is operating over a broadband connection instead of through a traditional phone line.


Because they operate online, VoIP phone systems are economical, scalable, and easy to install.

We’ll go over how VoIP phone systems compare to landline phone systems a bit more in the later section on the differences between the two.

What you need to know now is that this system is easy to use, high-tech, and provides many technological benefits such as cell phone call forwarding.

The cost of VoIP phone systems varies significantly. It can cost anywhere between $197 and $1,600.

Compare Quotes

Multi-Line Phone System

When you have a multi-line phone system, you have multiple physical lines that go through the same unit. Because this is a basic system, it can be a good system for small businesses that don’t have many incoming calls.

Multi-Line Phone System

Often, these include 2 to 4 lines. This means that you can have 2 to 4 calls going on at once. So if you want to have a call with a customer while your receptionist speaks to another customer, you can do this.

The cost of a multi-line phone system can be anywhere between $50 and $2,000.

Compare Quotes

What Are the Top Five Phone Systems for Small Businesses?

When it comes to choosing the best business phone system for your small business, it’s important to know what the top five phone systems are. That way, you’ll choose a phone system that you know is not only efficient but especially good for running a small business.

Best Business Phone SystemsGrasshopper

Grasshopper is a cloud-based VoIP business phone service. It’s specially designed for small companies, solo entrepreneurs, and startups. It makes it easy for you to use your smartphone or computer as your phone.

You can pay as little as $29 a month for one phone number.

Compare Quotes


This is the best phone system for small businesses. This is because it is low cost and makes it easy to use various devices. If you only need basic services such as video conferencing, you can successfully run your business using this phone system.

This cloud-based system can cost as little as $15 per month.

Compare Quotes


Vonage has many features that might appeal to you. These include call flip, video conferencing, text messaging, and next caller whisper announcements. It’s the perfect combination of advanced calling features, team collaboration tools, and basic phone service.

The cost is between $18 and $20 a month for each user on your plan. A toll-free or local number can be added for an extra fee.

Compare Quotes


While 8×8 offers different phone systems solutions for businesses of different sizes, they have a service that’s specifically designed for small business use. This is the Express Standard Communications Plan.

Keep in mind that is best for an office that has only one location.

You get features such as desktop apps, mobile apps, business texting, video conferencing, audio conferencing, and call management. You also have an unlimited free calling in Canada and the US.

The cost is $12 a month for each user.

Compare Quotes

Ooma Office

If you want many features, then look no further than Ooma Office. It comes with 35 standard features. These features include client video connection, file sharing, instant messaging. Additionally, you can use many phone types with this service.

These phone types include smartphones (with the app), IP phones, and analog phones.

Usually, the cost of Ooma Office is $19.95 monthly for each user. However, this cost goes up to $25 if you want extra features.

Compare Quotes

A Note About Small and Large Offices

Depending on whether you have a small or large office, you might benefit more from some of these phone systems for others. For example, if you have one small office where your whole team is based, you can use 8×8, since it’s location-based.

However, if you have a large office or run your business remotely in different locations around the world, then you would benefit from a more complex phone system.

In this case, you might want a cloud-based system that makes it easy to use your cell phone with the system.

What Are the Differences Between VoIP Business and Landline Phone Systems?

With a landline phone system, you’re physically limited. This is because all your communications—even if you have several lines—occur through the same unit. There are benefits to this system, of course. You have a business phone number, which can be local or toll-free.

You also have privacy and are in full control of your phone system. However, landline phone systems are becoming outdated.

A VoIP business phone system is far more modern. It runs on broadband, so everything is online.

This has many benefits. For example, you can forward client calls to a phone, tablet, or computer. It’s also easier to route calls. You can also use a virtual receptionist or have a high-tech answering service for calls.

Once you start using a VoIP business system, you’ll still be using physical phones, so it won’t feel different than using a landline phone system. But it’s much more effective for running your business.

What are the 5 Features Every Business Phone System Should Have?

When you’re looking for the right phone system for your small business, you need to know what features are essential for running your business right. These include call forwarding to multiple devices, extensions being easy to add, IVR, and more.

Call Forwarding to Multiple Devices

If you’re running a small business, then you need to be available at all times, even when you’re out of the office. That’s why call forwarding to multiple devices is such an important feature.

If you’re not in the office, this feature makes it possible for calls to go directly to your phone, tablet, or computer.

If you have a remote team, this is important too, since no one will be in the office to pick up the phone.

Extensions Being Easy to Add

One of the drawbacks of having a phone line system is that, if you need to add an extra line, this can be complicated and costly. By using a VoIP or cloud-based system, you avoid this problem. For this reason, these might be better choices for you.


“IVR” stands for “interactive voice response.” With this technology, you can have the phone do the work of directing your call instead of needing an administrative assistant to do it for you.

It recognizes the voice on the other side of the phone and can help them get connected to who they need to speak to.

Intuitive Browser Interface

You need an intuitive browser interface to make it easy to use your phone system with your computer. Especially if you plan on using your computer to take calls, you need to be able to pick up the phone and know what you’re doing.

This is also an important feature for remote teams.


Conferencing is also an important feature you need when you’re using a phone system for your small business. Whether you’re meeting with a client or running a business meeting, having the conference feature makes you seem professional.

It also makes it possible to run the meeting smoothly.

Need More Information?

Now that you’ve learned about the different phone systems you might be able to use for your small business, you might need additional information. Maybe you need advice on which type of phone system will be best for your small business.

Or maybe you want to learn about which providers are out there.

Whatever information you need, we’re here to help. At Cost Cutz, we’re experts when it comes to phone systems and other technologies you might invest in as a small business.

Get Quotes