Running a business means juggling many different tasks while making your budget work. This means when companies look to improve their business phone systems, they look for savings. More and more businesses have turned to using VoIP to satisfy their telephony needs while keeping costs low.
VoIP stands for Voice over Internet Protocol. This system uses high-speed broadband or a cable connection to send phone calls in the form of digital data across the internet. Many businesses use their existing internet connections to set up their VoIP system. This can save you money for the installation. The cost of a VoIP setup is one of the main attractions because it doesn’t need a substantial initial investment, among other things.
There are several good reasons to use VoIP over traditional phone systems. VoIP is cheaper while offering a range of advanced features such as virtual phone numbers, phone conferencing, call forwarding, and more. You will also gain quite a bit of flexibility in using phone systems to your advantage. VoIP also allows for easier scalability than other phone systems.
With the right VoIP, your business will see a boost in productivity and a reduction in costs. Podium prides itself on working with small businesses and helping them access all the technology that larger businesses have at their fingertips.
Podium offers many services to help small business owners, such as VoIP with easy access to call recording, video conferencing, unlimited calling, and more. They offer cost-effective ways to increase productivity across your business model. Podium also offers features of a unified inbox for all incoming messages to help keep you organized and provide easy access to messaging history. With these features, you can connect to your customers faster.
Keep reading for a better idea of how VoIP systems and costs work and if it is the right option for your company.
How much does a VoIP system cost?
The average VoIP system costs between $150 to $200 per phone or handset, with extensions costing up to $15 per month. Ongoing costs, which include monthly service and maintenance fees, may run about $20 to $30 per user.
It’s important to keep in mind that these costs are for hosted VoIP systems. There is a wide range of variability in your VoIP costs. Your expenditures are significantly affected by the type of VoIP service you choose for your business. For instance, how much your VoIP system costs will depend on whether it is hosted at another location or installed on-premise.
Hosted VoIP tends to be cheaper, while on-premise systems require a larger initial expense. Generally speaking, smaller businesses seek hosted VoIPs. Much larger companies will need to work with a VoIP service at their premises.
On-premises VoIP will have larger fees for installation. This is typically because you host the equipment at your place of business, and you mostly shoulder the upkeep and repairs required by the equipment. As such, large organizations and enterprises typically have the budget for these and choose these systems for their superior customizability.
With hosted services, you pay less because a provider ‘hosts’ your equipment at their location. They then deal with the technology upgrades, repairs, and maintenance on their end. This allows for cost savings, particularly for smaller business needs. Most businesses choose hosted VoIP systems because these don’t require a substantial initial investment. Some companies get away with just a compatible headset. In addition, there isn’t the headache of taking care of the equipment and keeping it updated. Many companies also opt for an auto attendant service.
How is VoIP phone priced?
On average, the pricing of a business VoIP system will vary depending on two main factors. The two main factors are outside lines and extensions. Understandably, the number of phone extensions or users significantly affects your VoIP system’s cost. This is because there is a cost associated with installing a desktop phone and setting it up properly. This is in addition to a monthly service charge as well.
In addition, the cost has to do with the number of outside lines the business needs. There will be a one-time port fee as well. On average, for cordless desktop phone options with a headset, you will see between $150 to $400 per phone and a $50 labor charge. You’ll see a one-time transfer fee averaging about $25.
Meanwhile, when you choose a VoIP system hosted by a third-party provider, you will have per-user, per-month service costs. Users can also opt for toll-free numbers so their clients don’t have to pay to call them in addition to unlimited calling or the use of an auto attendant.
It’s important to remember that hosted VoIP is by far the more budget-friendly option for setting up your VoIP system. When you select an on-premises VoIP, you will have fees for hardware, phones, setup, number of users, and licenses. These fees and service costs can add up quickly. When you set up your hosted system, in most cases, you pay only a fraction of what an on-premises system set-up costs. This is especially true when you can utilize a desktop phone instead of a call center.
Larger corporations select on-premises VoIP for their phone services because, in their case, its functionality often fits their needs better. They may want closer or immediate access to their call center equipment or need more phone lines. They also understand the need for upkeep and repair of the equipment. Often, they have an advisor suggesting this means of VoIP as a better option. Additionally, larger companies have room in the budget to keep more of their services in-house. This setup allows for a greater variety of features geared toward the needs of the corporate world.
Another factor to consider with installation costs is your internet speed. With VoIP services, you need to have a speed of 10Mbps, and most internet packages exceed this. Luckily, this means if your company has an Internet connection available, you have the beginnings of a VoIP system.
An advantage of using VoIP is that you won’t have contract fees to deal with. You can easily switch providers when you don’t have a contract, allowing you to save money when a better option becomes available. This will also encourage you to stay knowledgeable of what different companies are currently offering with their VoIP packages. Without the risk of incurring penalties associated with switching providers, you can benefit from the best of what is being offered. Therefore, you can shop for the best rates.
What factors affect VoIP phone system costs?
There are several factors affecting the cost of your VoIP system. These are more than just the outside lines and the number of extensions that are placed. Some other factors that affect the cost are as follows:
1. New Phone Equipment
When working with VoIP, business owners must deal with the cost of new phone equipment, which will be around $100 to $200 per phone. There is also the professional service fee of $25 to $50 per phone installation, as well as configuration costs. You must remember that VoIP desk phones become outdated after just two to three years. This means you need to factor these replacements in as well.
In some cases, a desktop or laptop computer will be used to run the VoIP software. You can also opt for a VoIP adapter, which will run around $60, which converts the signal as well. There are three basic options for your phone: adopt softphones, get phones that can work with VoIP, or use a converter.
Softphones use a device that makes your phone compatible with tablets and computers. These are what many VoIP providers use today. Often, this is the cheapest solution because most companies already have computers for their employees.
2. Network Infrastructure
Each phone will need to be able to connect to the internet to use VoIP technology. In some cases, you can use already available Ethernet ports for phone connections. Even when there is only one Ethernet port, you can daisy-chain your connection with a pass-through port for up to one gigabit.
When no Ethernet port is available, a new drop is installed with more labor costs. Some choose upgrades that allow the phones to be powered without a wall adapter with Power over Ethernet or PoE. Upgrades vary depending on individual company needs. These costs range from $150 to $200 per phone, with labor running about $50 a phone. Your port fee will be about $20 to $30 per phone.
3. Phone Number Migration
You should also factor in the cost to port or migrate your phone number to the new extension. Plan on a one-time migration fee for each extension. This will cost about $30.
4. Installation and Set Up
There will be the initial cost of installing the phone system. These fees include labor fees as well as professional service fees and can range from $25 to $50 a phone. These costs vary widely according to individual functionality and needs.
Set-up costs largely depend on whether you choose a cloud-based system, hosted system, modern system, or an on-premise system. It also depends on whether you need to acquire additional hardware over and above an initial headset.
5. Monthly VoIP Phone Service
In addition, you will incur monthly service charges. These can range from between $10 and $15 a month. If you select additional features such as call recording, video conferencing, or conference calling, you may pay up to $25 for each extension monthly.
VoIP vs. Other Phone Systems Costs: A Comparison
In truth, a VoIP will cost about a fraction of a legacy PBX service system that is based on landlines. In one case study, a VA nonprofit with about 18 employees was paying about $2,500 monthly for an old system. Once they started using a VoIP system, they were able to pay just $750 a month for their phone system. This gave them a savings of 70% and an overall increase in functionality across the board.
You should also consider if you are using a hosted VoIP or an on-premises VoIP. There will be differences in these pricing structures as well. For instance, a hosted VoIP will run between $20 to $30 a month, whereas an on-premises VoIP will cost you between $500 and $1,000 for each user. When you work with a hosted VoIP, you have additional equipment purchases as an option. But when you work with on-premise set-ups, you will need to purchase specialized equipment regularly.
There are several different VoIP service providers that you can choose from. These companies include RingCentral, Vonage, Zoom Phone, Acefone, Zoom One, and Ooma Office.
If you use a Zoom phone for conference calling, you see a good value for VoIP users. You will pay roughly $10 a month. If you have a team of 20 employees, that will be roughly $200 a month. You will also need to consider any additional features you decide to include in this scenario.
On the other hand, if you want to use Ooma for your VoIP services, you may end up paying up to $20 monthly. With twenty users, you can expect to see $399 a month.
When you factor phones into your setup, you will see an increase in costs. Costs will vary wildly, but with a high-end phone like the Fanvil X7C-V2 IP Phone, you can expect even higher expenses. If you get twenty units of these phones, you may end up spending over $3,500 more. Headsets drive up the costs even higher.
You should also factor in support or maintenance costs with hosted VoIP systems. With on-premise VoIP, you should have room in your budget for an in-house IT team. This team will be responsible for troubleshooting technical issues.
The Most Cost-Effective VoIP System for Growing Businesses
If your goal is to improve your business communications, then consider Podium’s VoIP phone system. Podium offers a selection of services geared to help the small business owner out. From having all your messages conveniently gathered in one place to making it easier to return missed calls, you can find what you need with their services at a fraction of the cost.
With Podium, you get an all-in-one solution that makes communicating with your client base easy. You can connect with leads quickly using Podium’s phone system and route calls as texts and social media items to the same inbox. With these features, you can easily turn more customer calls into revenue.
Keeping costs low is an important part of running a small business. Fortunately, there are several things you can do to keep costs down without sacrificing the customer experience. If you can use desk phones, you will see savings. You will also have more savings when you work with providers who are used to working with smaller businesses. This is because they have the best idea of what features their clients will use and won’t have them wasting money on features they won’t use.
VoIP Phone Price FAQs
VoIP services and how they are priced can be confusing. It is important to ask questions before making your decision. Here are a few of the more commonly asked questions to help get you on the right path.
Q: Can you get VoIP for free?
A: There are some free options for VoIP services, such as TextNow and 2ndLine. Small businesses can also count on solutions like Google Meet and Zoom for video calls as well.
Q: Can a VoIP phone replace a cell phone?
A: It is important to remember that a VoIP service doesn’t replace your cellular coverage. Instead, you can leverage your existing internet connection to gain phone services that are affordable and loaded with advanced features. This is without having to deal with the range of cellular providers out there.
Q: Why are some VoIP providers more expensive?
A: You will find that some VoIP providers charge higher costs than others. Commonly, some VoIP services are pricier because they are designed for bigger businesses that need more extensions and features. This may result in you paying for features you don’t use.
Q: How much is VoIP monthly?
A: With a hosted VoIP system, on average, you will see a cost of $20 to $30 for each user per month. In addition, you will have service fees, maintenance fees, and ongoing costs that will run you about $30 a month per extension.
Q: Is VoIP cheaper than regular phones?
A: In general, you will spend less on VoIP phones than you will on the traditional wired phone service. When switched to VoIP, local call costs will drop by 40%. You can also save 50% to 75% for your overall phone costs. Your domestic calls are typically included in most VoIP service plans, while international calls are charged nominal fees.
