How Small Businesses Can Estimate the Cost of a Business Phone System

Small businesses may start small, but they often have big dreams to grow. Thinking big means preparing for success by getting the right tools and systems in place to move your business forward. Growth doesn’t just happen—you need to make smart investments early on to build a solid foundation.

Statistics tell us that 20% of small businesses fail within their first year. What’s more, nearly 50% don’t survive past the five-year mark, and by the end of the decade, only 30% of businesses will still be standing—a sobering 70% failure rate. One major reason? They often lack the tools and infrastructure needed for smooth operations and good communication. Successful small businesses think ahead and invest in tools that help them work efficiently and provide value to their customers. One of them is communication tools like phone systems.

Why Is a Business Phone Essential for Small Businesses?

No matter how big or small your business is, good communication is key. A reliable business phone system helps your team stay connected with each other, your suppliers, and, most importantly, your customers.

A business phone gives your company a professional image with features like voicemails, automated greetings, and dedicated lines. It also helps your team work better together, making decisions quickly and easily. If your business works directly with customers, it makes you more reachable, so you can provide great service and build trust.

Modern business phones also come with advanced tools like call routing, call recording, and connections to customer management (CRM) software. These features make them an important tool, even for small businesses.

The challenge? The cost. For many small businesses, especially those just starting, the price of setting up a phone system can feel like a big hurdle. While it’s clear they’re important, the big questions remain—how much do they actually cost, and are there cheaper alternatives out there?

How to Figure Out Business Phone System Costs for Small Businesses

Planning for a business phone system means understanding the costs so you’re not surprised later. Here’s a guide to help you estimate what it’ll cost and plan wisely.

1. Startup Costs

Equipment

• If you need desk phones, basic ones might cost around $80–$100 each. Better models with more features, like a high-end phone, could be $200–$250.
• Conference phones for group calls can cost about $300.
• Simple call headsets start at $50, and wireless ones are closer to $200.

Installation Fees

• Some providers charge to set up the system, which could be free or as much as $500. App-based systems often skip these fees.

Moving Your Number

• Taking your current number to a new system might cost $10–$30 per number.

2. Monthly Costs

Per User

Many providers charge for each user each month.

• Virtual systems (like Grasshopper) might cost $29–$89 per month, depending on what features you want.
• Internet-based systems (like Nextiva or Zoom Phone) start at $15–$30 per user but go up to $50–$60 for extra tools.

Add-On Features

• Extra options like recording calls might cost an extra $5–$15 per user.
• Tracking call data for your business could be an extra $10 per user monthly.
• If you’re calling internationally, fees could start at 5¢–20¢ per minute, depending on the country.

3. Hardware Costs

• Systems like Google Voice use phones or computers you already own, which is cheaper.
• If you need special phones or headsets, basic models might cost around $50–$100.
• Think about whether you’ll need to replace gear or upgrade it as your business grows. Things like chargers or extra accessories might add up to $20–$50.

4. Will It Grow With You?

• Pick something that works for your business now AND later. For example, some plans cost $20–$30 extra per person if you add more users later.
• Some companies, like RingCentral, make moving to bigger plans easy without extra fees or hassle.

5. Hidden Costs to Watch For

Cancelling Plans Early

• If you decide to stop using a service early, you might need to pay a cancellation fee, sometimes $150–$400.

Internet Upgrades

• If you use internet-based services (VoIP), you’ll need fast internet. You might need to pay $50–$100 more per month to upgrade your internet plan.

For a budget-friendly setup, it can cost around $150 upfront and $30 per user each month. For a more advanced setup, expect to pay $1,000–$1,500 or more upfront, with monthly costs reaching $70–$100 per user.

Tips to Make the Right Decision

1. Think About Your Needs

How many people will use the system? What features do you need, like voicemail or mobile access? Tools like Google Voice start at just $10 per user a month and are great for small teams.

2. Compare Providers

Ask different companies for quotes. For instance, Nextiva gives unlimited calls and features for $30 per user per month, while others might charge extra for that.

3. Look for Discounts

Many providers give deals if you pay yearly. RingCentral, for example, might give a discount of up to 15% for annual payments or even include some free gear.

4. Plan for Growth

Look for systems that make it easy to add more lines or features without extra setup fees.

5. Try Before You Buy

Many companies offer free trials or demos—like Zoom Phone—so you can test if it works for you.

Build a Strong Foundation with the Right Phone System

Picking the right business phone system isn’t just another expense—it’s a smart step towards growing your business. A good phone system makes it easier for your team to communicate and ensures your customers can always reach you. Better communication means happier customers and a more organized team, which is key to running and growing your business smoothly.

The right system doesn’t just save time; it can also help you get more done. Many systems can connect with tools you already use, like apps for managing customers or tracking sales. This means your team can work faster and focus more on what matters.

Planning ahead is also a big moneysaver. Choosing a system that grows with your business means you won’t have to keep upgrading or switching providers as your needs change. A scalable system is a budget-friendly option that brings peace of mind for the future.

Investing in reliable tools, like a solid phone system, sets the stage for long-term success. It helps you keep your customers happy, your team productive, and your business ready to handle growth. Making the right choice today can lead to big rewards down the road!