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Types of business phone systems
There are two major types of business phone systems on the market today: key systems, Private Branch Exchange (PBX) systems, and KSU-less phones. The type of system you choose will depend on how many stations (extensions) you need and what features you require.

PBX and key systems
If your company has more than 32 employees a PBX may be the way to go. Most come standard with all the features you might want. In addition, they are totally programmable, so they can support the most complex implementations. You will likely pay a premium for this flexibility, but in many cases the price difference between PBX systems and less adaptable solutions will be smaller than you might expect.

In the 2 to 32 employee range, key systems are more typical. This type of phone system uses a central control device called the key system unit (KSU) to provide features that are not available with ordinary phones. For example, a central unit typically allows users to make calls to another in-office extension, and prevents other users from accidentally picking up a line that is being used. Modern key systems also come standard with most features a business would expect - but in some cases they are less customizable.

While there are technical differences between key and PBX systems, the distinctions to a user have become relatively blurred. Many key systems include features that were once available only on PBXs, and some systems operate internally as either a key or a PBX depending on the software that is installed. The term "hybrid" is often used to describe systems that resemble both key and PBX systems.

Also called trunks, lines indicate the total number of outside phone lines used by the company.

Extensions refer to every device within the company that needs to connect to the phone system. Most of the extensions will be for telephones. However, fax machines, credit card terminals, modems, and any other equipment that requires a phone connection must also be tallied.

In key systems, system size is usually indicated as a combination of lines and extensions. For example, a 12 x 36 system accommodates up to 12 lines and 36 extensions. In contrast, most PBXs define size in terms of "ports," which indicate the maximum number of connections that can be made to the system. This includes outside lines and inside extensions, as well as phone system accessories such as voice-mail or automated attendants.

Basic phone system features
Telephone systems can be equipped with hundreds of features for switching calls and directing traffic. However, that most companies never use most of their telephone features. Instead of comparing features on a one-to-one basis, you should examine how your phone system is used. Limit your feature search and evaluation to only those options that will improve the workflow in the office.

Some of the most popular features that are standard in many systems include:

  • An auto-attendant and voice processing system that answers your phones and instructs callers how to reach the person or department they are looking for. If you have a high volume of calls, this may be important - or you may value having a real person answer every call.
  • Conferencing features vary widely. Consider how often your staff needs to make conference calls, and how many different people need to call in. If the conferencing features you need aren't readily available, there are other options for conducting teleconferences.
  • Music-on-hold  - in most systems you simply plug in a source of music.
  • You can help callers find the people they need with dial by name, dial by extension, or dial from directory services.
  • Phone sets themselves have more standard features, as well. Display phones have a small screen that shows information such as the name and extension of an internal caller, the duration of call, and in some cases, caller ID. Speaker phones are familiar fixtures in many conference rooms, but are also now standard on most new hand sets. Speaker phones can be half-duplex, which means that only one person on the call can be heard at a time, or full-duplex, which lets both parties talk simultaneously, like a regular phone. Some phones also have a 'listen only' mode for speaker phone, which is useful for monitoring a conference call or while on hold.

Automatic call forwarding, also known as "follow me anywhere," helps both your employees and your callers. By routing incoming calls to wherever your employees are, whether on the road, working at home, or at a remote location, automatic forwarding increases the likelihood that callers reach the person they need. Callers do not need to make a second or third call. In addition, your employees avoid having to return to an overflowing voice-mail box.

For businesses with the highest call volumes, automatic call distribution (ACD) can really increase productivity. ACD manages incoming calls to maximize efficiency and reduce call answer times. It also tracks per-call and per-employee statistics, allowing you to improve your call center's responsiveness. While ACD is extremely valuable for large call centers, most small businesses probably will not see much advantage to it. Most Phone Systems come with a 12 month to 24 month warranty.

Some other questions you may want to ask:

  • Who will install the system? The dealer or a subcontractor?
  • Who will provide training? What will training include?
  • What are the costs associated with service and maintenance?
  • Does the dealer provide backup during a power failure?

Estimating costs for a complete phone system are very difficult: costs can quickly climb into the tens of thousands of dollars. Key systems and hybrids can range from $200 to $700 per user, depending on the features you select. For larger PBX systems, prices start at around $500 per user.

KSU-less systems generally cost between $130 and $225 per phone. While the savings may seem attractive, keep in mind that this is really only an option for offices of 8 or fewer people. If a KSU-less system fails to meet your needs and you have to upgrade your system again, the savings you thought you achieved had will vanish. And you'll also have to dedicate some of your staff time to set up and maintain the system.

Phone system prices vary based on five factors:

The base system
The central base system, or cabinet, controls and oversees the entire phone system. This price differs between systems and rises as cards and accessories are added. A small central unit can cost as little as $600, with the price increasing considerably to thousands of dollars for larger systems. The base system will be the main limiting factor for your phone system both in terms of features and expandability.

The actual phones
Most systems can be equipped with several different types of phones. The least expensive sets may cost less than $100, but can make accessing features very difficult or provide less than optimal sound quality. Most mid-level handsets sell for $200 to $300 per unit.

On the other end, some "executive phones" sell for many times the standard price. These phones can make using the system slightly easier, but are often just flashier - the main result of larger screens and more buttons is often increased profit for the dealer. Receptionist stations are also more expensive, but they bring important features for the person at the center of your telephone system. Most businesses will buy a mix of models.

Wiring and installation
Installing wires in an unfinished building can be fairly inexpensive. However, installing wiring through already finished walls can add quite a bit to your total cost. If you are in a location with existing wiring, make sure its wired as “home-run”wiring which is basically a separate wire for each jack. Example; 12 jacks in the office should mean 12 cables.

Get extra wiring installed. Avoid rewiring down the road and request that plenty of wiring be installed when the system is first purchased. A good benchmark is to ask for at least double the wiring you currently need. While this will add to the cost of installation, it will really only be a fraction of the cost you will face if wires need to be added later.

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