If you’re thinking of switching to VoIP service from a traditional landline based Key, PBX, or hybrid phone system, you’re not alone- businesses of all sizes are beginning to realized the cost-saving benefits of computer/telephony integration. Switching to a VOIP phone is relatively simple- changes can be made quickly and easily, and there is usually very little equipment to purchase.
Whether you’re switching to a business VoIP service or implementing a phone system for the first time, here are a few things you need to consider:
Internet Connectivity
VoIP phone systems use the internet to make and receive calls- you’ll need to make sure your connection and your power supply can support system requirements. Generally, a steady, uninterrupted power supply and a high-speed internet connection are all that’s needed. Your connection should be able to support the added traffic that the system will create. Vendors will ask how many employees will be using the system, how many calls are placed daily, and take into consideration features like auto attendant and call transferring when setting up your internet connection to support your system. You may need to purchase additional routers or install a backup power supply.
VoIP Adapters
If you’re witching to VoIP from a traditional phone system, you can save by purchasing adapters for your current phones. A traditional phone fitted with a VoIP adapter works identically to a VoIP phone. Most adapters are less than $50 each, and are often available in bulk discounts for larger offices. In lieu of adaptors, you can also purchase VoIP phones, headsets, or microphones that can be connected directly to a computer and used in place of a traditional headset. Most business and residential VoIP service providers sell both VoIP-compatible phones and adapters.
VoIP Phones
Voice over Internet Protocol phones are slightly more expensive that VoIP adapters, but are a good investment if you plan to use the system for several years. VoIP phones are easy to use and install- they don’t take any special training to set up. Once installed, they work identically to traditional phones. Most VoIP phones cost at least $100 each, with many vendors offering steep discounts for phones purchased in bulk.
Switching to a VoIP system takes surprisingly little time. Once you’ve decided to make the switch, you can shop around for providers and compare prices for services and equipment. Most providers can also make suggestions about system configuration (i.e., if you need a faster internet connection) during this stage. Once you’ve settled on a service provider and purchased equipment, you can have the new system up and running in less than a week.
About the Author
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.
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Quick Guide to Hosted Phone Systems
What’s the one thing your business uses every day that impacts customer relationships, vendor contacts, and even employee communication with one another? As popular as internet communication has become, there’s still no substitute for a telephone call in key situations. Most businesses don’t pay too much attention to their phone system unless service is down, the system is malfunctioning, or they are looking to cut costs by evaluating office expenses. This is a big mistake- the telephone system you use can have a big impact on your communications, employee productivity, and even company profitability.
The best phone systems for your business fit within your budget and will deliver the services you need. Hosted phone systems are fast becoming the top choice of businesses that want the functionality of an on-site PBX but the cost savings of VoIP. How do you know if a hosted system right for your business?
What is a “hosted” phone system?
A phone system is “hosted” because equipment (such as a phone cabinet and routing software) is housed at the provider’s data center, rather than at your office. Calls are routed to your business using a high-speed internet connection or a T-1 phone line. Hosted systems range from basic, VoIP-type systems where software can be downloaded in a few minutes to “enterprise grade” systems that require VoIP adaptors or phones. Similar to traditional PBX telephone systems, bandwidth for phone calls and data transfers can be designated by your own system operator to ensure call quality.
Calls are routed to your office from the provider location using a “dedicated connection,” or a T-1 line, or the “open internet.” A dedicated connection typically produces better call quality, but is much more expensive than routing calls using an open internet connection – usually about $500/monthly for an office with 10 employees or less and average internet use. Though routing calls over the internet can be more cost effective, it can lead to security problems for some companies if calls aren’t protected with a firewall or encryption protocol.
System Costs
Hosted system providers either work on month-to-month agreements or service contracts. Month-to-month services are typically used by smaller businesses that have one phone line and less than 10 extensions. Software for a small phone system can be downloaded from the provider website and installed within a few minutes- all you need in the way of equipment are the phones themselves. Contract services operate more like traditional phone system services: the contract specifies acceptable downtime, service offerings, maintenance, and other costs in advance.
The service cost can vary in range from $20/month for a month-to-month service to $200 or more for an enterprise based solution. You’ll also need to consider the costs of connection- using either an internet connection or T-1 line.
Make sure you compare several different price and service quotes before making a final decision. You should also compare local references and ask about call quality- especially if you choose to use an open internet connection to route calls instead of a T-1 line.
Here’s a tough question: What’s the one thing nearly all business owners consistently overpay for?
The answer is pretty surprising: Postage costs. Stamps, shipping charges, even the time it takes to go to the post office can all add up, costing thousands of dollars or more each year, depending on the volume of mail you ship. Most business owners don’t know exactly how much it costs to mail a particular parcel- so they end up “over stamping” and overpaying- often by quite a bit. Postal stores and shipping providers have overhead costs to meet, too- you pay for these when you’re charged to ship an item.
You can avoid overpayment- and create big savings- by using a postage meter. A postage machine, or digital mailing system, can calculate postage costs precisely, so you’ll never overpay, and can be used in-office, saving you trips to have packages shipped from other providers. Here’s a quick guide to using a postage meter:
How meters work
Postage meters are leased, and work similarly to a parking meter. You “fill up” by making a payment, and postage charges are drawn against your balance. Most meters allow you to “refill” when necessary, and some calculate monthly charges and send a bill- similar to paying for electricity costs. In addition to paying the postage charges, you’ll also need to lease the equipment. You can choose machines with advance features (scales, document feeders) or a simple stamp machine that just prints postage stamps on your outgoing mail.
Features
Mailing machine equipment can be very simple (a stamp machine) or very complex- some machines fold, collate, stamp, and stack bulk mailings containing several different printed pages. If your business sends large bulk mailings, you could benefit from such a machine. Machines can also be fitted with equipment to ship packages- you’ll weigh the parcel and arrange for the pickup online in a few simple steps. No matter which features you need, you can take advantage of cost savings- with a postage meter, shipping costs can be calculated down to the penny for each mailing, so you’ll never overpay.
Costs and billing
Equipment leasing costs can range from less than $20 a month to hundreds for sophisticated equipment designed to handle large volume mailings. You’ll pay for the postage machine equipment (the meter) as one bill, and pay postal charges according to current rates. Some meters only allow you to “pre-pay” postage charges, while other companies allow you to “pay as you go,” where you receive a bill for both postage and meter use costs at the end of a specified period of time. Pay-as-you-go options usually carry additional charges or fees.
You’ll generally sign a lease contract that specifies your terms of use for the meter. Longer term lease contracts can be significantly less expensive- if you’re willing to commit to a longer period of time using the equipment, you’ll get a better monthly rate. You can also choose to purchase a maintenance or service contract that covers repairs or part replacements over the life of the machine.
According to Forbes Magazine, businesses that don’t accept credit cards lose as much as 70% of sales to competitors who do allow this method of payment. With the number of Americans that use credit cards to make purchases increasing every day, you can’t afford to lose this many potential customers or clients. Here’s a quick and easy, real-world tested guide to accepting credit cards:
Merchant Accounts: The Basics
The merchant account is the “middle man” between a credit card account and a business’ bank account. Businesses that only process cards online usually use gateway software that collects credit card information, where retail businesses typically use credit card swipe machines. Whichever method you use, it’s necessary to have a merchant account to collect the information, verify it with the customer’s credit card provider, and make the transfer of funds from their account to yours. Merchant account providers often “bundle” the costs of online processing software into the account service costs.
Billing
Generally, merchant account providers will assess a fee for each transaction, whether a sale or a return (a “chargeback”). These fees are a portion of the transaction amount or a specified dollar amount. Many companies require monthly minimums, and will charge your business the remaining amount if this minimum is not met. Billing occurs automatically, as each “batch” of transactions is processed, typically at the close of each business day. Vendors provide reports detailing transactions, charges, and payments made at specified intervals.
Transaction Types
The fee assessed for each transaction typically depends on the way the sale or return is recorded. Swipe machines or those with signature capture devices carry the lowest risk of fraud, and thus transactions are less expensive to process. Online transaction s or those that are “keyed in” are typically more expensive, depending on the security measures taken to record the transaction. Vendors assess higher fees for “chargeback” or return transactions.
Service Contracts
Most businesses sign a service agreement that covers a specified period of time. Canceling your account before the service term expires generally carries penalties and fees, much like breaking a lease. Your per-transaction and monthly minimum rates are set when you apply for an account and sign the service agreement. The best rates are reserved for those businesses with a stable financial history and high credit card sales volume- many vendors offer “tiered” rate structures, where the per-transaction rate decreases the higher your sales volume rises. Though newer businesses just starting out might not be eligible for the best rates right away, they can negotiate for better terms as the business becomes more profitable.
Equipment and Software
Credit card processing equipment and software costs are often included in the service contract you sign with a provider. If you own or manage a retail store, chances are you’ll only need hardware, such as a swipe terminal or a signature capture device. Businesses that sell products online can puchase “gateway” software that is billed along with the merchant account service bill. Credit card terminals can be purchased, financed, or leased. It’s always a good idea to ask if there are any discounted models, or if a certain model is included with an account agreement.
Choosing an Account Provider: Where to Start
The most popular places to find a merchant services provider are through referral or using a vendor match service. You can consult businesses similar to yours in terms of size and sales volume: Ask who they use as a provider, if they are satisfied with the service they receive, and if they have any particular recommendations. A vendor search service allows you to compare several different companies, ask for quotes, and choose a vendor based on your requirements. Make sure you compare several different merchant account providers before signing a contract for services.
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.
One of the best ways to save money is to start with the expenses that are the easiest to reduce. Over 68% of business owners cited “cost savings” as the primary reason they’d switch phone systems, according to a recent survey. Phone systems are an often overlooked source of cost savings. By switching to VoIP or a hosted service, you can save tens of thousands of dollars a year in service and maintenance costs alone. Here’s our real business-tested, expert approved, step-by-step strategy for switching to a more cost effective phone system:
Make a list of requirements. If you already have a phone system, this is easy. Do you need voicemail, videoconferencing, call monitoring features, or more? If you’re a brand-new business, start with the basics- ask around to see what kinds of features are absolutely necessary and pick a system where you can add features later on an as-needed basis.
Do a little research on types of systems. Phone systems basically come in 4 flavors- landlines, internet-based, and combination of both. Traditional landline systems (Regular PBX phone systems and KSU systems) that use routing software (if you need lots of extensions or features) can be housed in your office or off-site by a provider. Internet-based systems use an internet connection to route calls. The type of system you choose makes a BIG difference: according to a recent study, switching to VoIP can save a business with over 500 employees up to $300,000 yearly.
Work out the nuts and bolts. If you have a current provider, you’ll need to work out the particulars of the switch. Consider things like downtime, number portability, and installation timing. Switching from a traditional landline model to a hosted PBX or VoIP system can take up to a week.
Negotiate your contract. Before you sign a brand new contract with a new provider, consider bargaining with your current vendor for more services, features, and upgrades to save on your overall cost. If you’re satisfied with your current service, bargaining is a great way to save without the hassle of switching to a new provider. One of the best ways to lower your bill is to lengthen your contract, expanding it to include more services at a lower cost.
Consider all potential expenses. Consider costs beyond those quoted by your service provider for equipment and setup expenses. Training is a good example. VoIP or hosted systems can have complex features that employees will need to learn how to use. Make sure you have the available budget to pay for training- at the very least, to pay for the time it will take for employees to learn how to use the new system. Some setup costs might not be apparent in the quote, for example, fees associated with switching internet service providers or upgrading your connection to handle the additional traffic a VoIP system will create. Make sure you consider all costs associated with the switch to get the big-picture estimate for how much money you’ll end up saving.
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.