Business Phone Service 101
Considering the rapid development of technology over the years, the telephone may seem like a throwback. Still, it remains one of the most powerful communication tools in any business environment. It's therefore essential for the success of your company - as well as your pocketbook - to have reliable, affordable business telephone service.
A business telephone service vendor can connect your company with local, long distance, and toll-free capabilities with a variety of calling solutions. They can provide service for offices of 1-2 people or hundreds of employees with different phone lines and extensions.
Many calling plans offer bundled services. These packages may include voicemail, outbound voice options, call waiting, caller ID, call blocking (preventing others from seeing where you're calling from), and rollover (callers will never receive a busy signal).
Business telephone service basics
You first need to assess what type of calls you will make more often: local or national. If you are a local company dealing with neighboring customers, you may not need anything more than an unlimited local calling plan that provides a fixed number of long distance minutes per month with a nominal fee for each additional minute. If you work with clients from across the United States, find a business telephone service package that provides unlimited local and long distance calling for one monthly fee.
Business telephone service vendors can also supply you with a toll-free phone number allowing clients to reach you from anywhere in the country at no cost to them. Domestic toll-free service can connect directly to your existing local phone numbers and can support 12 - 24 toll-free calls at the same time. International toll-free service lets you keep the same phone number for both domestic and international callers, allowing anyone to reach you at a single number from anywhere in the world.
With business telephone service, always keep in mind the additional fees you will need to pay. These are often referred to as "common charges" and include state and local taxes, FCC charges, connection fees, and placement and removal in directory listings. Also note that service plans that offer a low per-minute rate may require you to make a certain number of calls to preserve that price. Otherwise, monthly maintenance fees may apply.
Don't overlook VoIP (Voice over Internet Protocol), an emerging technology for transmitting ordinary telephone calls over the Internet. VoIP service can drastically slash your phone bills, especially if you make a lot of long-distance calls.
When it comes time to select phone service for your business you can go to a national provider or a discount carrier.
With a national provider, you get a company that has been around for a while and can deliver all the services you need. The actual technology the national providers use is very similar - you're essentially shopping for the best deals and customer service. Their services often come at a premium because they have marketing costs to consider.
Discount carriers work out deals with national providers and then pass the savings onto you. They use their own customer service and account maintenance teams, and have few overhead costs. You need to proceed with caution when working with a discount carrier - make sure you know how long they have been in business, what customer support they can offer, and what service levels they can guarantee.
Business telephone service buying checklist
Here are some key things to keep in mind before making your purchase:
- How many phone lines does my business need? Sometimes every phone in a facility needs to be replaced, at other times rudimentary analogue phones in areas such as warehouses or stock yards work fine, saving the owner money.
- Am I making primarily local or long distance calls? Not all services are the same, at times there can be limits on long distance services. International long distance calls are not rated the same as U.S. international calls and should be looked at as a separate option.
- How many minutes do I use in a month? Knowing how many minutes a month you use could be the difference between paying for an unlimited plan or a less expensive limited plan.
- Will I need international calling? If your company makes more than an hour of international calls a month, look into an international plan.
- What are my calling patterns? (Times of day, days of the week, inbound/outbound traffic.) Some plans offer "unlimited after" plans that enable a business to make calls for free after a certain time.
- Do I need a toll-free phone number? If you deal with a lot of clients who live outside of your calling area, a toll free number might be appreciated by them.
- Can a business phone services vendor help me get VoIP service? Some business telephone solutions are "fire and forget", meaning they will sell you service and leave the implementation up to the purchaser. Most services will offer an installation as well as service, but often at a premium to start-up costs.
- Are my current business phone numbers portable? In 99% of all cases current phone numbers are portable (able to moved to the new service, saving the inconvenience of getting a new number). To avoid a customer black out, see what sort of integration and migration solution a new service might have in place.
Business telephone service pricing
You can get a bundled package for business phone service that includes all the standard features for about $60 per month per phone line. You can find plans with a fixed number of long distance minutes for $40 to $50 plus $0.04-$0.06 for every minute over that amount. There may be volume discounts available depending on the number of lines you need. Some companies may require an activation fee of $30-$40, but they may be willing to waive that charge.
Pricing on toll-free numbers vary. You may pay a monthly service fee of $50-$80 plus per call charges. Setting up a toll-free number may also require a setup fee of $50 or more.
Make sure to factor in network access surcharges, carrier-access charges, and state & local taxes, which will vary. Federal taxes on business phone service run about 3% and you will be responsible for paying 6% to 12% of the costs of your calls for Universal Service Fund fees. You may also be responsible for a PICC (presubscribed interexchange carrier charge) of $3 to $5 per phone line.
- Avoid long-term contracts. The standard business telephone service contract lasts for one year. Since prices change often - typically in your favor - you don't want to be locked in at a higher rate.
- Always read the fine print. While you're responsible for a considerable number of charges in addition to monthly fees, make sure to examine exactly what you're paying for. Every billing statement should provide a detailed summary of your fees; if something looks questionable, contact your vendor.
- Essential technical support. Make sure you know who to contact if you need service assistance after hours (weekends, middle of the night, etc.). You can't afford to lose business because of service failure.
- Aggressively seek discounts. Some vendors may be able to give you a lower rate if you place a credit card or bank account number on file to allow them to automatically withdraw funds for monthly fees.