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How Much Does Business VoIP Cost?

Due to the multitude of benefits and added flexibility for businesses of all sizes, VoIP is quickly becoming a workplace telecom staple and taking over the traditional desktop phone. Even though when it was still a new business technology, many businesses were skeptical about its voice quality and low price compared to traditional phone lines, cloud-based technology has improved by leaps and bounds in the last few years, replacing older tech models in terms of large-scale efficiency. The result? VoIP systems are now not only equivalent (if not superior) in quality to traditional phone lines, but also much more affordable.

After researching VoIP’s greater flexibility, scalability, and tech-compatibility compared to their current traditional telecom platform, the next question most companies have is… Just how much can I save by switching to VoIP?

The short answer is: it depends on your company’s size, needs, and telecom preferences. The good news is: since VoIP utilizes internet connection (something most businesses have and already pay for), you’ll cut costs right off the bat. When you’re ready to take the next step and switch over to VoIP, keep in mind that there are dozens of VoIP features on the market today. It makes the most sense to sit down with your team and decide which features you currently utilize, which new features you might want to integrate, and how many phone lines you’ll require.

VoIP Cost Breakdown

Depending on which VoIP provider you choose, you generally have two types of costs to consider – start-up costs and ongoing/monthly costs. While start-up costs will vary depending on how drastically you’re switching your telecom system (in terms of your current system, equipment you already own, and its compatibility with VoIP), start-up costs for VoIP are generally lower than those for traditional phone systems for both small and large companies. Additionally, after factoring in much lower ongoing costs, companies that switch over see much lower bills and a higher ROI in the long run.

Start-up Costs

1.    Hosting

One of the first things you’ll have to consider when beginning a VoIP service is whether you want to host your PBX system on-site (“on-site PBX”) or use a hosted PBX system (“off-site PBX”). Of course, as with any important business decision, there’s pros and cons to each.

pros-and-cons-of-voip

If you’re interested in all that VoIP has to offer, you’re probably enticed by its hefty cost-saving options. With a hosted PBX, you’d be leaving hosting expenses to the VoIP provider. As a result, you’ll enjoy very low costs for hardware, installation and configuration, and ongoing maintenance and support. Essentially, once you have the appropriate VoIP-compatible equipment, sign up for the service, and schedule a configuration appointment with the provider – you’re all set!

Opting to host your PBX system on-site is the pricier option of the two – you’ll have more upfront costs like set-up, equipment for hosting on-site, and hiring a specialist to run a training session. You’ll also need to outsource ongoing maintenance costs or hire an IT team internally. On the other hand, hosting on-site does give you some considerable benefits. You’ll have much more autonomy with your system to configure it the way you want. For example, you can install a CTI port – computer-telephony integration – and streamline your computer and telephone systems, as well as having immediate access to your system if it were to “go down.”

2. Equipment

Does your company already have telecom equipment that’s compatible with a VoIP system? If you’re not sure, a provider will be able to advise when you’re receiving a quote. Whether you have the compatible equipment already or not, you’ll want to think through what type of equipment is the best fit for your workplace. You have several options here…

business-phone-systems
  • Utilize equipment employees already have – smartphones, tablets, desktops, laptops – and direct your business line through them, purchasing only headsets for call privacy
  • Install VoIP desktop phones
  • Purchase VoIP handset (wireless) phones

While some businesses enjoy the flexible, on-the-go perks of opting for smartphone/wireless compatibility, other businesses that do most of their work in the office may prefer a desktop or handset phone. In terms of pricing, desktop phones will be the priciest option (around $80+ per seat), handsets will be mid-range (around $40+), and headsets (around $20+) or equipment-free will be the cheapest option. Keep in mind that many desktop models also require Ethernet cables to connect to the internet, which would be an add-on to your budget. However, make sure whatever equipment option you go with, you’ve considered the long-term benefits and drawbacks to each.

3.    Broadband

Something to keep in mind before switching over to VoIP is that you’ll see the best voice quality with high internet connectivity. Most businesses already have high connectivity in place, since multiple employees are using the same broadband simultaneously on an everyday basis, but if you’re currently experiencing issues with your internet running “slower” at times, it would be smart to consider upgrading. The cost to add a higher broadband to your current subscription is slim to nothing compared to the ROI you’ll see from using VoIP.

VoIP experts recommend broadband service around 10 MBPS for good VoIP service. If you’re unsure about your current internet quality, you can always ask your current internet provider or check your router information. If you’re looking to upgrade to an even faster and more VoIP-compatible internet, look into cable- or fiber-based options for the best quality voice results.

4.    Training

Usually, when a company is used to using traditional phone lines, they benefit from hiring someone to train employees on-site when configuring the new system. VoIP trainers can show your employees how to operate their new equipment, route business calls to their smart-devices, connect their headsets to their desktop or laptop, add new users when hiring and on-boarding, and how to utilize all the features your company is paying for. The add-on training price will vary across different VoIP providers. According to Robin Gareiss, Partner at Nemertes Research, some providers may include training if they’re hosting your service, but it can cost between $1,000 – $5,000 to train internal IT staff. This is something you can negotiate with providers when signing up. 

Ongoing Costs

1.    Cost per User

In terms of company size, the good news is that no matter how many employees your business needs to accommodate with VoIP, it can be done. One of the top perks of VoIP companies typically enjoy is its easy scalability – adding more lines when your business grows and hires is a piece of cake. Of course, the larger the company and amount of direct lines on the plan, the larger the monthly cost. However, as with many business services, you’ll be rewarded for buying in bulk – signing up a large number of lines usually means discounts and lower rates.

Some plans will allow you to pay per usage rather than line – meaning, you pay for the time you spend on the phone monthly, regardless of how many users you have. This might make sense for businesses with fewer employees in industries that use the phone infrequently. Make sure you ask your provider about different options.

2.    Subscription and Features

As with traditional phone plans, your VoIP provider will offer different tier packages depending on your business’s needs and desired features. The highest tiers will have the largest selection of features – including call recording, video conferencing, voicemail transcription, integration with external mobile systems and CRM’s, and so on. Lower tier packages will typically give you all your telecom basics – calling, voicemail, mobile app connectivity, as well as customer support – but you’ll be limited in what you can use your system for. Of course, each provider has their own tiers and different features included in each, so make sure to analyze your different options before choosing a provider. To look through a fuller list of VoIP features, read here. So you can get an idea of what is “average” to spend, most frequently used business subscription plans range from around $20 – $50 monthly – per user.

What’s the catch?

We knew you’d ask! VoIP oftentimes seems too good to be true as a business solution. “Hidden costs” is a phrase that makes all business owners cringe, so it’s best to be aware of “worst case scenarios” right off the bat.

What you’ll want to think about – generally – is the risk of using the internet for any business assets and what it could mean for your company’s daily functioning. To start, it will streamline and quicken productivity. On the other hand, as with any internet-based asset, you’ll run the general risk of internet security (data leaks, password phishing) that essentially every business is subjected to, if they are online. Another common concern with VoIP is choppy internet connection and poor call quality. This is directly determined by the internet provider and subscription you pay for, so if you assure you have sufficient internet quality before switching over, you won’t have to worry about these hidden payments down the road.

reasons-to-switch-to-voip-for-business

Overall, VoIP technology is rapidly improving and businesses across the U.S. and elsewhere are quickly adapting it. Studies across the board show you will save money from making the switch. For example, VoIP provider Kunnect recently came out with a study that demonstrated the cost savings for a mid-size company with all expenses (start-up and ongoing) considered, as well as productivity gains compared to their previous phone system. They found that the average amount saved per year was $5,000, even after start-up costs were factored in. in terms of productivity, they estimated almost $500 in gains per user, totaling almost $25,000 a year for ~50-person company. Add that onto your annual revenue and see what you’re missing out on!

Visit us here to get started on price comparisons and find out exactly what you can expect to pay for your company’s specific needs. Our goal is to find you the best telecom service, increase your ROI, and ultimately make your business happier!

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