What Does A Business Phone System Cost?

Ready for a new business phone system, but the potential costs are preventing you from taking the plunge? Well, we have great news — the latest phone systems offer options for every budget!

Whether you’re a brand new business that needs a basic phone system or your established business needs an upgraded system, this guide outlines typical costs for business phone systems.

What Does A Business Phone System Cost? The Short Answer

What does a business phone system cost? The answer is … it depends. The cost of a business phone system varies by a number of factors, including your monthly cost, the number of lines you have, number of users, and other details we’ll dive into a little bit later.

The initial investment of your business phone system may range from free or to a few dollars a month for a virtual phone line you use with your own equipment to thousands of dollars upfront for new equipment and a system loaded with features.

Ongoing monthly costs can range from $0 to a few bucks to hundreds of dollars or more for a fully featured system used across multiple business locations.

What Factors Influence The Cost Of Business Phone Systems?

The cost of business phone systems isn’t as simple as a single monthly fee. In addition to choosing a phone plan, you’ll also have to pay for features, equipment, and more. Here’s a breakdown of the factors that influence the cost of business phone systems.

Monthly Service Fees

When you sign up for phone service through a telecommunications provider, you will have to pay a monthly fee. Generally, Voice over Internet Protocol (VoIP) service that uses your internet connection is cheaper than traditional landline service that requires physical wiring.

Monthly costs vary significantly by provider. A general range for monthly service fees for basic service is about $10 to $40 per user for VoIP, while landline services run about $20 to $50 per user per month. But, of course, these are just average prices, so your actual monthly costs may be higher or lower.

It is possible to get a free virtual phone number from a service like Google Voice. Note that these free services don’t have many of the great features you’ll find through the most popular VoIP providers and aren’t suitable for most businesses. However, this may be a viable option for independent contractors or freelancers who don’t want to give out their personal phone numbers.

Fees For Additional Users, Lines, & Devices

Most monthly fees include one user and one line. If you need multiple lines or need to add multiple users, you’ll have to pay additional fees to your phone company.

As you might’ve guessed, these fees vary by provider. Generally, additional users add $10 to $50 per month to your phone bill. However, many providers offer volume discounts, so you may be able to score lower pricing per user if you have to add multiple employees.

Fees For Add-On Features

Both landline and VoIP offer a basic set of features for your business phone system. This includes things like caller ID, call forwarding, call waiting, and three-way calling. The best VoIP providers add in even more features for no additional cost.

However, many providers offer advanced features for an additional fee. Available features include everything from communication tools like instant messaging and video conferencing to things like custom hold music, CRM integrations, and call monitoring. (For more information on features, check out 40 top features for VoIP phone systems.)

Pricing varies from a few dollars a month for an added feature to several hundred dollars for multiple advanced features.

Equipment Pricing

Telephone equipment will also add to your system costs.

You can score a basic two- or three-line business phone for around $50 per unit. If you prefer to upgrade, you can expect to pay anywhere from $100 to $300+ for more advanced phone models that include LCD displays, touchscreens, video calling, and more.

There’s additional equipment you can purchase for your business phone system, including:

• Speakers
• Headsets
• Modem & router
• Ethernet cables & switches
• Analog telephone adapters
• Cameras & other video conferencing equipment

If you want to skip the equipment expense entirely, there are VoIP apps available that you can use with your own phones, laptops, and desktop computers.

Additional Fees

There are a few additional fees that you may see on your monthly phone bill, including:

• Taxes, Surcharges, & Regulatory Fees: Taxes, surcharges, and regulatory fees can increase your bill by around 20% to 30%. These fees include surcharges for 911 emergency services, infrastructure surcharges, and state, federal, and local taxes.
• International Calling Charges: If you do business overseas, international calling rates will apply when you make international calls.
• Number Porting Fees: Transferring (or porting) an old phone number to a new system will often result in a one-time number porting charge.
• Installation Fees: If you need to have a landline service set up at your business, you may incur an installation charge.

Buying VS Leasing Equipment: Is It Worth It?

One way that you may try to cut costs is by leasing your VoIP hardware. When you lease equipment, you’ll make smaller payments over a set period of time instead of paying the entire cost upfront.

While this seems like an appealing deal, the truth is that leasing can be quite expensive. While you make smaller payments, the total cost of ownership is often far more expensive than just purchasing your hardware outright. Leasing also means that you’ll be locked into a contract, which could be an issue if you decide to switch providers.

What Will You Pay For Your Business Phone System?

The price you pay for your business phone system depends on what type of equipment and services your business needs.

A one-line setup with a basic desk setup requires little upfront investment and can have a low monthly fee. A more extensive setup with numerous advanced features for multiple users can easily run your business thousands of dollars annually.

We recommend that you compare your options before making a commitment. Look beyond just the monthly subscription fee—consider what features are included in your monthly pricing, additional fees that can drive up the cost of your bill, quality of service, and the provider’s overall reputation.

VoIP phone service is growing in popularity among small business owners because of its affordable pricing, high-quality calling, and great features. Start your search by checking out our picks for best VoIP providers to find the right system for your business.