You want the best and more for your small business, but the cost of installing and maintaining phone lines for a private branch exchange (PBX) for your modest operations can be off-putting. Not to mention, a PBX landline system might not even have all the features you want, like video conferencing, advanced voicemail, or text messaging from a business number.

So how do you get advanced business communications for pricing that’s right for your small business?

The answer is a virtual phone system.

We’re going to fill you in on everything you need to know about virtual phone systems, how they work, their benefits, and our picks for the top virtual phone systems for small businesses.

Use the links below to jump to the section you’re most interested in:

What is a virtual phone system?

How does a virtual phone work?

Differences between a landline office phone system and a virtual phone system

Benefits of a VoIP-powered business phone service

What's the best phone system for a small business?

FAQs

You may have heard of virtual business phone systems already, but you could still be unsure of what they are or how they work. So let’s go over exactly what a virtual phone system is.

A virtual phone system is a telephony solution that uses voice over internet protocol (VoIP) technology to connect users. These days, it's primarily sold as a cloud-based service. This means users only need to subscribe to a virtual phone system provider, to start making and receiving calls from any location, from almost any device.

A virtual phone system gives businesses standard phone solutions (that is basic inbound and outbound calling) as well as more advanced features like voicemail, auto attendant, and call forwarding. Most virtual phone service providers also offer mobile apps, desktop apps, and web browser accessibility to users, so they’re able to make and take calls from devices like smartphones and laptops.

Virtual phone systems give you the flexibility and functionality to conduct small business operations using your preferred devices whenever needed. You don’t need to be in the office to connect with a client using virtual phone solutions. With this type of business phone system, you can send a quick SMS via your work phone number while you’re waiting for the dentist.

So how exactly does a cloud phone system with virtual telephone lines send and receive calls from any device anywhere in the world?

As we mentioned earlier, virtual phone systems use VoIP technology. When you make a virtual phone call, VoIP breaks your voice up into information that’s collected into digitized data packets. These packets are sent across the internet to your intended destination, where they’re decoded, organized, and delivered to the recipient.

This all happens in real time, often with great call quality. All you need is a great internet connection, a device for making calls, and a virtual business phone system provider that offers an app that works with your preferred device. And because VoIP removes the need for specialized hardware when transmitting calls, the whole process becomes relatively frictionless regardless of the distance between the caller and the person being called.

There are fundamental differences between landline and virtual phone solutions. These include:

1. What they use to connect people. Landlines use physical wires made of copper while virtual lines use the internet.
2. How mobile they are. Landline telephony forces people to stay in one place (usually their office) just to use their professional phone numbers, while virtual telecommunications allow them to use the numbers with any device, no matter where they’re working from.
3. Their functionality. For the most part, analog phone setups concern themselves with basic phone call management; meanwhile, VoIP-based systems make it easier to combine voice communications with other modes of connection like team messaging (more on this later).

Beyond these distinctions, there are other major differences we think you should focus on when comparing business phone systems to virtual phone systems.

See the table below:

Now that we’ve covered the differences between traditional and virtual phone systems, let's take a closer look at the benefits of a VoIP-based business phone service.

Collaborate more easily

With a VoIP solution, you can boost the performance of your workforce with tools they can use to work from the office, on the go, or anything in between. Everyone in your team can make business calls or send SMS from their work numbers from any device you want to use. You won’t have to worry about audio quality as long as you have access to good internet connection.

If you’re running a completely virtual office, you can invest in a VoIP service that comes as part of a UCaaaS solution so you can take advantage of screen sharing, messaging, and video chats to strengthen workflows and employee connections.

Basic collaboration features to look for:

• Conference calling
• Business texting
• CRM integrations (especially important if you’re running phone-based sales campaigns or customer support operations)

Identify opportunities with analytics

Which sounds better—keeping track of all your inbound calls and sales on a spreadsheet or seeing all your call data (and more) with your virtual phone system’s advanced analytics? With business-class VoIP phone solutions, you can get call metrics monitoring and more. This is especially true if you go for a virtual phone system that’s specifically designed to accommodate call center communications.

Have every call and customer tracked and broken down for the insights you need to make data-based decisions. Monitor trends and know exactly when you need to increase communications coverage.

Analytics features to look for:

• Speech analytics
• Trend analysis
• Custom metrics and reporting
• Instant notifications when there are drastic changes to the data

Increase productivity with advanced call features

Virtual phone systems for business let you make calls and answer calls—that’s a given. But they should also give you the ability to do so much more without forcing you to pay extra.

For example, you can get call management capabilities likeauto attendant and personalized call waiting music as a standard part of your company’s virtual telephony solution. You can simplify call handling with queues that direct your customers to the correct extensions and call transfers that let you manually send calls to another person. You can even get features like call recording, which lets you hang on to audio files of calls for training or documentation purposes.

If you’re running a call center, you can also choose to get a VoIP solution that’s specifically focused on supporting activities for that type of organization. This gives you the ability to use next-level outbound calling features like auto dialing. But fair warning—this is not something you should expect out of a standard virtual phone system.

Call features to look for:

• Caller ID
• Customizable hold music
• Call queuing
• Virtual receptionist (a.k.a. automated attendant)

Work anywhere and everywhere

Because your virtual phone service is, well, virtual, you don’t need to worry about setting up desk phones and wired connections for devices. You can use your own cell phone, tablet, or desktop in conjunction with a mobile or desktop app. Don’t want to download software? No problem! Many of the best VoIP-based business phone solutions let you use whatever web browser you have access to. That means you can work from the office, your house, or a beach (with internet) 10,000 miles away.

Flexible work features to look for:

• Integrations with your favorite business apps
• Text messaging
• Virtual local and toll-free numbers

Take advantage of automation and machine learning

With automation and machine learning, you can use advanced technologies to optimize your business. Automation powers features like interactive voice response (IVR), which provides customers multi-level menu options based on their contact information and their menu choices, and automatic call distribution (ACD), which uses information gathered by the IVR to get them the assistance they need. Call centers of any size can benefit from this.

Machine learning, a process by which artificial intelligence (AI) technologies learn from data and routines as you use a system, is not always included in virtual phone service packages. But when it is, you’ll get automatic workflow optimization in your systems based on your organization’s standard behavior with the technology.

Automation features to look for:

• IVR
• Automatic call distribution or call queuing
• Call and voicemail transcription

Deciding which small business phone system is right for you can be tricky, so we’re going to recommend you give our offerings a try. Call us biased, but we genuinely think 8x8 is the best virtual phone system for your small business.

Here’s why.

If you have a small business, we’re guessing you want to keep costs down. 8x8 gives you cloud-based (in other words, virtual) telephony as part of a unified communications as a service suite. This covers more than just advanced phone capabilities. It includes video conferencing and instant messaging for teams, as well as other tools for productive collaboration.

Let’s get into the fun stuff you can get out of 8x8.

Cloud-based business phone system

Supported by secure, fully redundant data centers, 8x8’s business phone system gives you the call quality and security necessary for professional communications. Business continuity is practically guaranteed with 99.999% uptime SLA, and we’re constantly ensuring our technology stays up-to-date on data privacy compliance via third-party certifications.

And as far as day-to-day operations go, you get everything you need out of a business phone system. This means you can engage in phone calls (both incoming and outgoing), send and receive faxes, use your business phone number for SMS, set up a voicemail inbox, and establish call management rules for business hours.

And that’s just the basics. You can use a call recording feature that you can customize for recording all or just some conversations—it’s up to you. You can choose which audio message to listen to first with visual voicemail OR just read transcripts of the messages. You can have calls routed to your personal cell phone when you’re out of the office, or simply have other

team members answering them. You can even have custom greetings for your phone line. It’s like an office PBX system, but better.

How you maximize these features is up to you.

Video conferencing

Video conferencing is more important than ever for any small business, if only because it makes it possible to work with people even when they’re operating in different cities. With 8x8, you get to hold HD video meetings on any device. Even better, you can have up to 100 people participating in that call (more, if you choose a more expensive plan).

You can join video conferences from your phone with the same video and audio quality you’d expect from a desktop or conference room setup. It also lets you choose any background you want for your video conferences, whether you like the glamour of a custom background or like to keep it simple with a defocused background.

Video conferencing with 8x8 is 100% secure and encrypted. And, as a bonus, you also have the option to initiate the video call recording function so you can review what you’ve covered in that interaction.

Chat

Business communications aren’t limited to real-time channels like voice and video calls. A lot of the time chat—whether you’re talking 1:1 or team messaging—works just as well, with the added benefit of having automatic documentation of your conversation that you can review.

With 8x8, you can have direct messaging or group conversations with co-workers for any project. This includes sharing files and the option to flip your chats into voice or video conferencing.

And, if you happen to be working with people using other apps like Slack or Skype for particular projects, you can use integrations that let you work across those different platforms through 8x8.

Bonus: Contact center capabilities

While most wouldn’t expect a small business to have a contact center serving their customers, it’s certainly doable. Even with just 8x8’s virtual phone system, you can manage customer interactions. It’s just a matter of knowing what features to leverage. For example:

You can integrate it with a CRM like Salesforce

Use a multi-level auto attendant to put callers in queues that will help connect them to an employee who can provide assistance

Monitor calls in order to give guidance to team members handling customer calls

Of course, you also have the option to get a plan that covers 8x8 Contact Center solutions.

Everything you may want for your business communications—the virtual phone system, the team chat, the video calls, and more—are available with pretty much every 8x8 plan. And the fun part is that it can be used from anywhere.

The 8x8 Work desktop app has versions for Mac and PC. Prefer using smartphones or some other mobile device? We also have a mobile app with versions that work with Android and iOS operating systems.

While we do serve organizations of all sizes, our most affordable plan is designed specifically for small businesses— and it’s priced at $15 a month per user. This already includes unlimited calls (in the US and Canada), video conferencing, and chat. If you’re still not sure if you want to spend that much money on a communications system.

So what are you waiting for?