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VoIP Technology has Plenty to Offer Small Businesses

IP-based phones can reduce costs and improve customer service for a better bottom line

Have you ever played the game of “telephone,” where you pass a message from one person to the next to see how much the message changes by the time it gets to the last person? Garbled communications, although funny in that context, are not amusing in business. And like mixed messages and miscommunication, a traditional PBX phone system may be holding your small business back. They’re often hard to use and manage and, in some cases, provide inferior call quality. An IP-based phone system can help your company cut costs, increase flexibility, and improve communications--all of which can give your company a competitive edge. As a result, more and more companies are taking advantage of IP-based phone systems. In-Stat predicts that 79% of U.S. businesses will be using VoIP technology by 2013.

IP phones use Voice over IP (VoIP) technology to send voice traffic over data networks. VoIP works by translating speech into data packets that are then sent over broadband connections, instead of traditional phone lines. The data is then translated back into voice when it reaches its destination. By routing calls over your existing data network, you can reduce your company’s communications costs and eliminate the need for a separate voice network. In addition, features you’re currently paying extra for, such as conference calling, call forwarding, and caller ID, are included as part of your VoIP service; no more hidden fees. And you can save money by no longer having to pay a technician to add extra lines to your phone system.

In addition to saving money, VoIP provides more flexibility than a traditional phone system. You can easily add new or move existing employees. And employees who are working from home or on the road can access your company’s phone services using a VPN connection to the office.

If your small business operates in multiple locations, you can connect those offices using a single receptionist and voicemail system. With a VoIP phone system, you can use internal four-digit calling between locations, which significantly reduces long-distance phone charges. For more ways to maximize efficiency between multiple locations, check out our previous post on

In-house or hosted

If you’re interested in adopting VoIP for your small business, you need to decide whether you want it based on site at your company or outsourced to a vendor. Installing an IP-based phone system in-house means that you’re responsible for purchasing, installing, and maintaining the equipment as well as managing the various contracts with your local, long distance, and Internet providers.

For companies that lack technical staff and resources, outsourcing an IP phone system makes more sense. Other than the phones on your employees’ desks, all the other equipment resides with and is managed by the provider. In many cases, you pay just a flat monthly fee for the VoIP services.

Is your small business using an IP-based phone system? What benefits has your company seen by using VoIP vs. a traditional phone system?

Learn how a Small Dental Practice is Using VoIP to save money.

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