When Grand Rapids-based Buys Chiropractic PLLC made the switch from traditional landline phones to a voice over Internet protocol (VoIP) system, Aaron Buys and his staff were a bit hesitant.
It can be daunting to completely overhaul the telecommunications system at any small business, but with the rising costs of traditional service, Buys was questioning what exactly he was paying for.
“Traditional telephone service was getting more and more expensive and offering nothing new to show for it,” Buys said. “We made the switch in (the) interest of cost savings and the overall improvement in service quality.”
Buys is not alone these days in opting for new phone technologies like VoIP or smartphones. Nearly 79 percent of American businesses use VoIP phones at one location, according to Santa Clara, Calif.-based market research firm In-Stat. That’s up from 42 percent in 2009.
But while many Michigan small businesses like Buys Chiropractic have started to wrestle with switching to VoIP, that decision could soon be accelerated because landlines may not be an option in the future.
The reason: The state Legislature is considering a bill that would pave the way for phone companies to phase out offering traditional landline phone services by 2017 and replace them with VoIP and other alternatives.
Senate Bill 636, sponsored by State Sen. Mike Nofs, R-Battle Creek, would also put in place safeguards for certain areas where Internet-based communications aren’t a reliable option.
For the uninitiated, VoIP is a method of making phone calls that uses the Internet instead of typical landlines. While apps such as Skype or Google Voice allow users to place calls from their computers, most small businesses opt for services that integrate IP phones, which look like traditional office phones except they plug into an Internet connection with an ethernet cable.
They offer a variety of pluses for small business owners, including cost savings, mobility and scalability.
On the minus side: The quality of calls is only as good as your Internet connection, and some services like 911 and international calling may not be available.
“VoIP technology is quite frankly an equalizer for small businesses trying to compete with their larger counterparts in the marketplace,” said Dave Jones, an executive at 50Tel, a Jackson-based VoIP provider that works with clients throughout the state including the parent company of MiBiz. “We are able to give a guy working out of his garage the same feel and functionality of a Fortune 500 company with very little upfront costs and a lower monthly investment.”
Without a doubt, the biggest attraction of VoIP is its low cost. Because it’s Internet-based, many hosted systems require little-to-no hardware investment other than routers, ethernet cables and the phones themselves, which some service providers offer at reduced prices.
“The nice thing about VoIP is that the hardware needed to install a feature-rich system is considerably less than that of a landline phone system,” Jones said.
50Tel provides phones with its service packages, and customers can buy extra VoIP phones for between $60 and $150, depending on what kind of features the customer needs. To buy the phones independently could cost around $100 to $300, Jones said.
Monthly service fees can run up to 40 percent lower than traditional phone lines, according to estimates. National provider Vonage charges $39.99 per line for service with unlimited nationwide calling, while some local providers such as Grand Rapids-based Relevant Networks charge about $30 per line. Many providers offer monthly service with no long-term contract.
VoIP is especially cost-effective if you have employees at satellite offices or telecommuters working from home because calls between company phones are handled via the network rather than over the public phone lines. So if your bookkeeper wants to take his VoIP phone home during a polar vortex and make AR calls, he can plug it into his home Internet connection to make and receive calls on the company lines at no additional cost.
Some VoIP service providers also have introduced mobile apps that let workers make and receive phone calls on their mobile devices using the company phone numbers. That allows employees to protect their privacy by not giving out their phone number and lets the company protect the relationship with the customer. If an employee leaves, the calls are simply routed to the company rather than to the departed employee’s cell phone.
Many small business owners are finding that type of mobility, as well as the scalability of VoIP systems, attractive. Adding new extensions can be as easy as connecting a VoIP-enabled phone to the network and adjusting some software settings on the phone and in the cloud. Typically, the service provider will handle those changes at little or no charge.
There are negatives to VoIP systems. First and foremost, they depend on your Internet connection. If you lose your connection, the phones on your workers’ desks will go dark, though most providers automatically push incoming calls directly to voicemail or reroute them to the user’s mobile phone.
Even when the connection is working, bandwidth issues can impact the quality of calls. If you have workers that are downloading videos or moving large files that consume bandwidth, it can make for a call filled with pauses, clicks or even dropped calls.
While most VoIP services provide unlimited domestic calling (i.e., to the U.S. and Canada), there may be extra charges for connecting to mobile phones or conference calling. Additionally, many VoIP providers don’t offer 911 service or charge extra for it.
Even with the negatives, VoIP adoption continues to grow rapidly. As broadband becomes more widely available in rural areas and telecommuting continues to grow, VoIP will become the predominant phone service for businesses over the next decade, analysts predict.
The number of telecommuters is expected to rise 21 percent to 3.9 million by 2016, according to San Diego, Calif.-based Global Workplace Analytics, which tracks teleworking. VoIP and other mobile systems will help small businesses compete for talent by allowing them to hire the best person for the job, regardless of where he or she lives, analysts say.
David Stutzman of Grand Rapids-based Relevant Networks, a local VoIP provider, describes VoIP as a “completely different animal” from traditional phone service, which may intimidate some users from making the switch from traditional phone systems.
Chiropractor Buys admitted he and his employees’ hesitation toward learning a new system that was integral into his business’ everyday operations, but his office has been happy with the benefits.
“I think VoIP is easily the best-kept secret in the telephone/communications world,” Buys said. “The versatility and value it provides to me as a small business owner are far superior to that of our old system and I’m very pleased that I made the switch. I would encourage people to at least explore it as an option no matter what type of business they run.”