VOIP Office Phone Small Business

The Essential VoIP Guide For Small Business

Being able to make phone calls through the internet has become fairly common, there are hundreds of mobile apps and services that allow you to make Voice Over IP calls or VoIP for short.  From Skype to Gmail Voice, it seems like VoIP communications are everywhere.

But is the VoIP quality and reliability there so your business can make the switch from a traditional telephone service to VoIP communications?

If you have ever used one of those free mobile VoIP apps, or even Skype, you know that the quality can sometimes be sketchy, and that won't cut it when business grade communications are required.

Both internet bandwidth and speeds are growing at a rapid rate, making the transmission of a bandwidth heavy medium like voice communications not only possible but of a quality that matches any traditional telephone line.  As internet and mobile data plans get faster, VoIP becomes even more reliable to use as a communications platform.

We made the switch to VoIP about 7 years ago using Ring Central and haven't looked back.  As internet bandwidth and speeds increase, VoIP gets more and more reliable and the feature set keeps expanding, making it an even better choice for business communications.  Being able to seamlessly use our phone lines both in the office and out in the field via mobile apps has been a game changer for us.  And added features like setting up conference calls, virtual faxing and scheduled call rules, has made VoIP has been awesome.

Although VoIP can bring your small business communications to a whole new level, at a price that's cheaper than traditional telephone lines, there are still several things you need to consider before making the jump.  This guide will serve to help educate you on VoIP technology as well as what to look for when deciding to make the switch.

What is Voice over IP (VoIP)?

VoIP is the transmission of communications of voice and other communication-based media like SMS messages over the internet, instead of using a Public Switched Telephone Network, a fancy term for your traditional Ma Bell telephone line.  Your phone connects to your modem/router and communications travel over the internet via WiFi, high-speed internet connection, or your mobile data plan.

The small business playbook guide to voip

How does VoIP work?

In very simple terms, for a VoIP phone call to take place, several things need to happen:

  • A “session” is created by the VoIP protocol that  is being used
  • The protocol attempts to connect to the termination point, otherwise known as the phone number you are trying to call
  • If a connection is made, they “Shake Hands”, starting the session (phone call)
  • Your voice is turned into digital “packets” that are sent through the internet connection.  When those packets reach the termination point, it is turned back into your voice for the other person to hear.  I always visualize packets of sugar flying through the internet whenever I hear the term “Packets”.
  • When you hang up, the session is terminated

As you can see, the transmission of your voice (or any other media for that matter) is actually a very complicated and technical process that is made simple for everyday use.

The Good Things About VoIP

  • The speed of the internet today makes VoIP communications not only reliable but of a quality that matches traditional phone lines
  • Long term costs are almost always lower than using a traditional telephone line
  • A VoIP communications system comes with loads of features that you either have to pay extra for or aren't available with traditional phone lines
  • Almost always includes all of the basic features like call forwarding and caller ID in the base price

The Not So Good Things About VoIP

  • Voice quality depends largely on the speed and quality of your internet connection.
  • Unless you have a backup power source, you will lose your phone lines if the power goes out.  If the internet goes down, you will also lose your ability to make calls
  • Depending on your needs,  setting  up your system and maintaining it can become complicated
  • If your business is a heavy internet bandwidth user for other applications and you do not have a very fast internet data plan, you may need a second internet line just for your VoIP communications.

VoIP Terminology You Should Know

SIP – Session Initiation Protocol – is a protocol that is the proposed standard for initiating, modifying, and terminating an interactive user session that involves multimedia elements such as video, voice, instant messaging, online games, and virtual reality.  While there are several types of protocols used to initiate a VoIP phone call, SIP is the most widely used.

PBX – Private Branch Exchange (also called Private Business Exchange) – is a telephone exchange that is owned by a private business, as opposed to one owned by a common carrier or by a telephone company.  A PBX system allows a business to route calls to different employees (ie; employees have their own extensions) and manages the system themselves.  While a traditional PBX system involves a big physical piece of hardware on site that you have to manage, with a VoIP system, you can have a cloud based version that is hosted and managed remotely on a server.

IVR – Interactive Voice Response – otherwise known as an auto attendant, it is the annoying computerized voice that big corporations use to direct your call and to drive you insane.  They can be useful if used the right way.

DID – Direct Inward Dialing –  is basically a phone number that is assigned to your telephone line.  With VoIP you have can several DID's (phone numbers) assigned to a single line.  An example would be, with a single phone line, people can call your 1-800 number, your local number, as well as any other DID's you, have assigned to that line….and they will all ring to the same phone line.  As you can see, you can have multiple DID's for a single phone line.

IP Phone – VoIP phone – Allows you to place calls over your VoIP network.  An IP phone has it's own IP Address (like your computer does, to identify itself online) and houses all of the “brains” that helps it to communicate and connect on a VoIP network.  All of the information is stored on the phone itself, rather than with a traditional phone, which does not store any information inside it.

ATA – Analog Terminal Adapter – is a small device (looks like a modem or router) that allows you to use a traditional telephone with VoIP.  The ATA houses the “brains” (the same inside an IP phone) because traditional phones cannot communicate on a VoIP network without one.

Latency – Otherwise known as “Lag”, Latency is the time between the moment a voice packet is transmitted and the moment it reaches its destination.  If the latency is too large, you will start to experience reduced call quality and stuttering when speaking on the phone.

QoS  – Quality of Service – Most routers you buy today have QoS features built in.  What it does is it determines the importance of different types of internet activity (voice calls, viewing video, downloading, etc) and gives some activities priority over others.  So if you are speaking on the phone and someone else starts downloading a large file, QoS will know to slow down the file download as not to degrade the quality of the voice call.

Things You Can Do With VoIP That You Can't With A Traditional Phone Line

  • Assign multiple DID's, aka “phone numbers”  to a single phone line without having to purchase additional phone lines
  • Assign a virtual FAX number without having an actual FAX machine
  • Plug and Play. Since the IP phones or ATA's house the “brains”, you can unplug them from the internet, take them halfway across the world, plug it in again…..and you would get a dial tone that rings when your phone number is called.
  • Voicemail sent directly to your email inbox
  • Complex call rules like simultaneous ringing on multiple phones and automatic call forwarding after a certain amount of rings.
  • Create a cloud-based PBX system for your business
  • Make calls from your computer and even on your cell phone using your data plan.
  • Seamlessly integrate your office phones and your mobile phones so you never miss an important call.

What do you need to know before making the switch to VoIP?

There are several things you will need to take into consideration before making a decision, some are technical matters while others are business related questions you need to answer before you decide.

How many phone lines will I need?

The cost difference between traditional phone lines and VoIP really start to show when you are using several phone lines, though you will still see cost savings even with a single line.  If you are currently using several phones in your business, you will need to make sure you have Cat5 cables (these are the standard cables you connect your router to your computer devices with) that reach the areas where you intend to have a phone.  Depending on the layout and needs of your business, it may be easy to install the extra cables or it may complex.  There are also several new alternatives to installing additional Cat5 cables.

How fast is my internet connection?

Though internet speeds are pretty fast these days and can handle the load of a VoIP call, several factors need to be assessed such as:

  • The number of phone lines that will be installed and the expected use of those phones.  Will you have several people on the phone simultaneously?
  • Does your business make heavy use of computers?  If you are downloading large files or accessing HD streaming video, it may reduce the quality of your VoIP connections.

In order to have a reliable quality VoIP call, you will need to have about 100kbps of both upload and download speeds as a starter.  Fortunately, high-speed internet plans can easily handle several simultaneous calls without a hitch.  The only thing you need to be aware of is the bandwidth requirements of the other devices on your internet connection like your computers and possibly a Point of Sale (POS) system you are using.  You can check your internet connection speed here, the results will vary depending on the current bandwidth load on your internet connection.

Number of Concurrent Calls Minimum Required Bandwidth Recommended speed
1 100 Kbps Up and Down 3 MBps Up and Down
3 300 Kbps Up and Down 3 MBps Up and Down
5 500 Kbps Up and Down 5 MBps Up and Down
10 1 MBps Up and Down 5-10 MBps Up and Down

Is my traditional phone line powering anything else in my business?

Be sure that removing your old telephone line will not affect other services in your business.  If you have an alarm system, your phone line is usually the way the alarm company connects to the alarm in your business.  Also, your credit card machine or Point of Sale system is sometimes connected with dial-up service from your phone line, though most also offer a high-speed connection and are the standard connection these days.

What will be the total cost to switch to VoIP?

While your monthly payments will most likely be lower with VoIP, you still need to take into consideration the costs for the initial setup.  New IP phones/ATA's, additional equipment like extra Cat5 cables and installation can easily add up to several hundred dollars.  Calculate the entire cost of switching and determine you Rate of Return (ROI) when you recoup your investment.  Fortunately, many of the larger VoIP providers, like Ring Central,  offer some kind of incentive to make the switch.

Do I have a backup plan if I lose power or an Internet connection?

For residential VoIP customers, I usually just advise them to use their cell phone if they lose power, but for a business, you have to have a backup plan as a phone line is the lifeblood of most businesses.  For business customers, I usually make the following recommendations:

  • Have a battery backup source in case of a power failure.  For less than $100, you can get a battery that will power your modem, router, and phones for several hours
  • Keep one traditional phone line for backup.  I like to keep one traditional line to use as backup in case of a power/internet outage
  • Learn how to access your VoIP admin panel (your VoIP service provider will give you access) and learn how to forward your business phone number to another phone, like your cell phone, in case of an outage

Some Final Tips

Learn how to troubleshoot your VoIP system.  Having someone around that is familiar with the system will save you a ton of headaches when problems are encountered.  Though VoIP is very reliable, sometimes little things happen that you will need to know how to troubleshoot.  Learning how to reset your modem, router and IP phones/Ata's and being able to access your admin panel (your VoIP service provider will give you access) will save you a lot of time and headaches when you encounter problems.

Learn how to use your new system.  While VoIP offers features that traditional phone lines can't provide, they are useless if you don't take the time to educate yourself on their use.  Most VoIP users end up using their new systems exactly the way they used their old phone system (which is ok) because they never took the time to learn all of those cool features that makes VoIP such a great technology.

Making an informed choice

Do your homework before choosing a provider.  Speak to other business owners that are currently using VoIP for their phone service and see what company they use and their experience with them.  While there are many national VoIP providers like Ring Central, 8×8, and Vonage (a good choice if you will only be needing a single line and maybe a FAX line) that have very good reputations, there are lots of smaller, local companies that can provide VoIP services.  The most important thing is to find a company that has a reputation for great support as there is definitely a learning curve and bugs to work out when implementing a new VoIP system in your business.

Making the switch to VoIP communications for your business can not only save you money but can help increase business productivity and flexibility with how and where you and your employees communicate.  The important thing is to educate yourself on the technology and make an informed choice….hopefully this article helped you with both!

If you have any questions, contact me here

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CEO at 3Bug Media
Gary Shouldis is the founder of 3Bug Media, a web marketing company that helps businesses create 360 Marketing Strategies to dominate their market. His blog is read by over 20 thousand small business owners a month and has been featured in the N.Y. Times Small Business, Business Insider and Yahoo Small Business.
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