PBX Phone Systems for Small Business – A Buyer’s Guide

All businesses depend on their communications networks for their continued success, and the bedrock of every network is the office phone system and the PBX that drives it. A PBX, or Private Branch Exchange, is the control hub for any phone system operating multiple extensions. It is the gateway for incoming and outgoing calls, and allows staff and management to remain connected throughout the work environment. In the past, this required the installation and maintenance of expensive, heavily hardware dependent, telephone systems which were typically out of the range of small to mid-zed businesses. Today, however, there are cost effective alternatives to the traditional PBX phone system which put enterprise-class features and functions well within the reach of small business owners.

What is a PBX?

Originally, a PBX system was simply the central switching station for a business’ phone calls. A traditional PBX consisted of lines and stations. The lines were the conduit to the public switched telephony network (PSTN), while the stations consisted of any connectible device, including telephones, fax machines, and credit card terminals. The original purpose of the PBX was to maximize the potential of limited resources. Rather than have a separate line for each employee, a business could use a smaller number of lines to support a larger number of stations. Incoming calls would be answered by an attendant, and then redirected to the appropriate extension. When an employee needed to place a call, the attendant would connect them to an available outside line in order to route the call to its intended destination.

Over time, the PBX evolved into a more unified communications network. Operators were replaced by automated attendants, and features expanded to more fully support the needs of the modern workplace. Today, a PBX must do more than simply route calls to their destinations and enable inter-office communications, it must also support call queuing, voice messaging, audio and video conferencing, and email and voice-mail functions. The modern PBX has become a feature-rich phone system that delivers the features and functions businesses need to thrive in a competitive marketplace.

Understanding PBX Phone System Choices

There are four basic types of PBX systems, each with its own advantages and disadvantages. Naturally, different types of businesses will demand different types of PBX systems, and there is no one-size-fits-all solution. But before you can make an informed choice, you need to understand a bit more about each type of system.

  • Traditional PBX: Traditional PBX systems, as described above, rely on the established telephony infrastructure to connect multiple lines to multiple stations. That means old fashioned landlines and on-site junction boxes connecting your business to the local phone company. These systems are slowly being usurped by more advanced technology, most specifically VoIP and Cloud computing services (which exploit the internet to make phone services much more cost effective). Because they require a major investment to install and maintain, they have become cost prohibitive for all but the largest corporate enterprises, and, for the most part, only because the legacy infrastructure is still in place and the most significant costs have already been absorbed by the company. For most businesses, a traditional PBX system is no longer a viable option, as the cost and limited features are incompatible with modern business models.
  • IP PBX: An IP-PBX departs from the traditional model by utilizing VoIP technology to reduce a business’ telecommunications costs. While an obvious advance over the traditional PBX, start up costs associated with an IP-PBX can still be substantial. Hardware must be installed on-site, and set up can be time consuming and expensive. That being said, there are some definite advantages to these types of systems, chief among them being ease of operation and support for a greater number of phone lines. IP-PBX systems also deliver a wide range of features that promote greater efficiency in the workplace, including audio and video conferencing, voice messaging, call queuing and forwarding, and voice-mail to email support. Because an IP-PBX system is installed on-site, it also allows for greater hands-on control of its features and functions (though this typically requires a knowledgeable IT staff which will add to the total cost of ownership).IP-PBX systems are a good fit for larger firms with existing legacy infrastructures, and their compatibility with most standard PBX systems allows for a smooth and painless transition. A variety of companies currently market IP-PBX communications solutions for the business community, including:
    • ShoreTel
    • Cisco
    • Vonage Business Solutions
    • Inspired Telecom
  • Hosted VoIP PBX: This is, perhaps, the most popular phone system solution for small and mid-sized businesses looking to support a maximum of 20 to 25 active stations. With a hosted PBX, your phone systems basic infrastructure is operated and maintained off-site by the VoIP provider. Business owners choose the features and functions they desire, and the vendor sets up the phone system and maintains it off-site. This eliminates the need to purchase expensive hardware, and business owners simply pay a low monthly fee to the service provider. A hosted VoIP PBX delivers a full range of features, including conferencing (audio and video), auto attendant, call queuing and forwarding, voice-mail to email, and support for remote workers. This makes it an ideal solution for businesses who need a feature-rich communications network at an affordable price.There are a number of vendors that offer hosted VoIP PBX solutions for small businesses. The cost for service varies depending on provider and service package. Basic hosted PBX services, offering limited but effective features, can be found for as little as $19.99 a month. Cost per month rises as service packages become more feature rich.

    The most popular hosted VoIP PBX vendors include:

    • Nextiva
    • Vonage Business Solutions
    • Ring Central
    • Fonality
    • Broadvoice Business
  • Virtual PBX: A virtual PBX (sometimes called a cloud PBX) is similar to a hosted VoIP PBX in that there is no costly hardware to install or maintain. All of the features and functions of the phone system are delivered via the internet, and controlled through a web-based interface. Virtual PBX systems do not, as a rule, offer as many features as a hosted PBX or an on-site IP-PBX. That being said, a cloud-based PBX can support most basic functions like auto attendant, conferencing, call queuing and forwarding, and voice-mail. It can also support remote workers, which is an important consideration for small enterprises who may not have a central brick-and-mortar office, and so rely on mobile communications to keep management and employees connected. Ultimately, the main draw of a cloud-based PBX is its cost and ease of operation, though they are most suitable for small businesses with limited communications needs.In many cases, virtual PBX solutions are available from the same firms that offer hosted PBX systems. They are often considered a subset of hosted PBX services, and are priced accordingly. Some of the most successful, and well-reviewed, virtual PBX providers include:
    • Grasshopper
    • Nextiva
    • Virtual PBX
    • Ring Central
    • Vonage Business Solutions

The Importance of Choosing the Right Features and Functions

For most businesses the choice of phone system is understandably guided by cost considerations, which is largely as it should be. Whether you’re running a Fortune 500 company or operating a small local enterprise, you need to keep an eye on your bottom line. However, cost should never supersede features and functionality. To get the best out of your phone system, you need to balance cost against the availability of performance enhancing features. An inexpensive cloud-based PBX that doesn’t support and empower your employees fails to deliver a best return on investment. Likewise, an on-site IP-PBX system boasting features that you and your staff never use is a further waste of money.

Common features and functions associated with enterprise-class PBX systems include:

  • Customizable Auto Attendant with Interactive Voice Response
  • Reviewable Extension Directory
  • Call Queuing and Forwarding
  • Call Monitoring and Recording
  • Conferencing (audio and/or video)
  • Least Cost Routing
  • Voice-mail and Email
  • Voice Messaging
  • VoIP Support
  • Support for digital phones and softphones
  • Web-based Interface for On-site Management
  • Disaster Recovery and Technical Support

Before choosing any PBX system, consider your business model and the communications features it needs to succeed. Different types of PBX systems offer different features, and no single system will be an obvious fit for all business enterprises. Take your time, and review the options available. Balance the features and support being offered with the total cost of operation (not just the cost of installation and set-up) to find the PBX system that best suits your business’ day to day needs as well as your bottom line.

If PBX sounds like a good option for your business, try our free PBX price tool and get matched to multiple dealers who will try to get you the best deal for your business.