Best VoIP Providers for Small Businesses

Matthew Speiser

Matthew is a staff writer at Fundera. He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Matthew's writing has been published in Business Insider, The Fiscal Times, Best Company, and NJ.com, among others. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world. He has a degree in journalism from the University of Delaware. Email: matthew.speiser@fundera.com.

Telephonic communication is more important for businesses than ever before. Consider all the different business functions that can be handled over the phone: sales calls, customer service and support, payments, conference calls, and video conferencing, to name a few. There’s also a host of other products and services that can work with your phone system to expedite workflows, such as fax machines, voicemail transcription, call recording, and text messaging.

With the market demanding so much from business phone services, it’s no surprise that more and more businesses are switching from a landline to a VoIP provider.

VoIP is an acronym for voice over internet protocol, or phone service over the internet. Anyone with a decent internet connection can get VoIP—and for some businesses it offers a cheaper and more capable solution than a traditional phone line. That’s why VoIP revenue is projected to grow from $94.1 million in 2016 to $195.4 billion by 2024. 

If your business relies heavily on phone communication, it might make sense to align yourself with a business VoIP provider. But before you enter the marketplace, it helps to understand what you are shopping for, and the potential benefits this service could offer. That’s why we’re going to tell you everything you need to know about VoIP: what it is, how it works, and how it can benefit your business.

Once armed with this knowledge, we’ll give you a rundown of the best business VoIP providers on the market so you can make the most informed decision for your business.

What Is VoIP?

For those that don’t understand telephonic communication, VoIP can seem like pretty heady stuff. But if you boil it down to its simplest form, what VoIP does is turn your voice into a data packet and then sends that data packet over an IP network. To accomplish this, the voice information is encoded using software called a codec. The codec turns the voice information into a digital signal (stored in a data packet), and then another codec turns the digital signal back into voice information when it reaches its destination. 

What this does is allow you to make a call from a computer, a VoIP-enabled phone, or other internet-enabled VoIP devices. Since VoIP runs over an IP network, all of your data is stored in the cloud and settings are accessible through an online portal. The online portal allows you to perform most of the functions you would on a traditional phone, such as making calls and adding new contacts.

VoIP is also referred to as IP telephony, internet telephony, broadband telephony, or broadband phone service.

voip providers

How Does VoIP Work?

At the risk of sounding too jargon-y, let’s get a better understanding of just how VoIP works. Let’s say you need to make a business call from your office. If you had a landline, you’d pick up a phone that is hardwired to a server located somewhere in your office. With a VoIP device, however, there are three different ways to make a call. Let’s look at all three:

ATA

ATA stands for Analog Telephone Adapter. This is the most common way to make a VoIP call. Simply plug your phone into the ATA and you’re ready to start making calls. The ATA allows you to connect a standard phone to your computer or your internet connection for use with VoIP. The ATA will then take your voice information and convert it into a digital signal to be transmitted across the web.

Computer-to-Computer

Almost every business VoIP provider allows you to make a call through your computer, given that you have a microphone, speaker, sound card, and internet connection. Simply access the dashboard given by your VoIP provider and place a call. 

IP Phone

An IP phone is a fancy way of saying that a phone has an ethernet port. Having an ethernet port allows the phone to be connected directly to an internet router, giving it VoIP capabilities. 

Benefits of VoIP

Now that we understand what VoIP is and how it works, let’s learn a bit more about why a business would want to bring their phone service online. 

There are really two main benefits to VoIP: price and functionality. VoIP providers generally charge less money for their services than traditional phone service companies. This is because VoIP calls are cheaper to place than traditional calls because they do not use phone lines. Since there are only a finite number of phone lines, calls placed over them can be expensive. Placing calls over the internet circumvents this problem. In fact, many business VoIP providers even offer long-distance calling for free.

When it comes to functionality, VoIP offers several benefits:

  • Mobility: Because VoIP calls are placed over the internet, you can place a call anywhere you want as long as you are connected to the internet and have a VoIP-enabled device. Furthermore, because your information is stored in the cloud, you never have to worry about losing data when you transfer services.
  • Features: Having telephonic information transferred over the internet allows for some other tech-savvy functionality. For example, many business VoIP providers offer voicemail-to-text transcriptions that can be sent directly to your email. Other common features include the ability to create conference calls and record phone calls. 
  • Call routing: Many VoIP systems allow you to adjust your settings to determine when you receive phone calls and how. For example, you can have a call first be forwarded to your office. If you don’t pick up after a few rings, it can then be forwarded to your phone or laptop. 

How to Pick the Best VoIP Provider for Your Business

As you can see, VoIP can help your business in many different ways. However, not all VoIP providers are created equal. According to Rick Dionisio, COO at VoIP provider Ringboost, there are 10 items to consider when picking a VoIP provider:

  • Service: Every company will claim the highest quality service in terms of call clarity and outages, but you still need to do your due diligence. Ask about uptime, reliability, and frequency of issues. Ensure your contract includes language about getting prorated refunds for extended outages. See what customers say about the service on review sites. Ask the VoIP provider for references and then, in turn, ask their clients about the quality of service.
  • Pricing and plans: Think about how your business places and receives calls and create an overview of your needs before you review plan options. How many employees do you have? What is your inbound call volume? Does your business require international calling? Use this information to find the plan that fits you best, and don’t be afraid to negotiate for better rates or additional features.
  • Scalability: Ask questions about how the business VoIP provider can grow with you. Some VoIP providers work solely with small businesses, while others specialize in enterprise. Ask about your potential future-state—will you need phone trees (automated telephone systems), IVRs (interactive voice response technology), or multiple extensions? Will growing your account require your contract term to restart or can you expand at any time? 
  • Contract term: Some VoIP providers will require you to sign a two to three year agreement in exchange for lower pricing. Some allow month-to-month. Think about how your needs may change, and look at term requirements as well as cancelation penalties.
  • Mobile app: Most VoIP providers have the ability to forward calls, but a mobile app can give you a full suite of tools to manage your calls on the go. Benefits include enabling you to be able to text from your office phone number and access voicemail messages remotely. For a smaller company where you are out in the field a lot, a great app can make all the difference. 
  • Features and functionality: What is the user experience like, and how can it be customized? Always ask for a walk through of the portal and get a sense of what features you can control yourself without having to reach out to the VoIP provider. What can you access from the portal? Is it easy to set up and to add and remove features? Can it be customized down to the user level? Can you upload your own IVR? Can you do sequential call forwarding? How does the portal sync with the app? Which features require additional cost? If there are features you don’t need, can they be disabled and save you money? If you are starting a new phone service, can you select your phone number(s) and customize it to fit your business?
  • Third-party integration and UCaaS: Unified Communications as a Service is a way to bundle all office communications into a single stream or portal—such as rolling up your phone service with intra-office messenger apps. If your company uses multiple communication channels, ask about the support the VoIP provider gives for third-party service and whether they can come together seamlessly in a dashboard.
  • Customer support: The service that a business VoIP provider gives isn’t just about the phone calls, it’s about the support services. Know what your VoIP service options are: What are the ways you can get in touch? What are the live hours? Is there a guaranteed response time? Some VoIP providers will require you to sign up for a service plan that costs extra.
  • Security: Because business VoIP providers are cloud-based, there need be security measures. Make sure the systems in place are up to par and calls are encrypted. Understand what happens if there is a security issue—will there be down time or are there redundancies and secondary servers that can be fired up to cover call volume? Try to assess how proactive they are about security updates. Look at their latest documentation and see how recently it was updated. Ask about security update communications and ask for a sample security update—is it written in language that you as a customer can understand? Does it give you a sense of trust and comfort that the provider is being diligent?
  • Emergency services: Enhanced 911 (E911) is not offered by all business VoIP providers, so if it is important to you and your business, know whether it is supported or not.  

voip providers

Best VoIP Providers

Now that you know how to shop for a business VoIP provider like an expert, let’s get into our top picks for small business owners:

RingCentral

RingCentral is one of the best known VoIP providers on the market and a popular choice among large sales teams and call centers. The features you get with RingCentral depend upon the subscription you sign up for. 

The cheapest RingCentral subscription is their Phone plan. This plan costs $14.99 per user per month for up to 20 users. Keep in mind, pricing is based on an annual billing cycle; it is more expensive if you opt for monthly. For your money you’ll get unlimited phone calls from within the U.S., a toll-free or local phone number, 100 toll-free minutes per month, an auto attendant, and voicemail-to-text transcription. 

The Standard plan costs $24.99 per user per month and does not have a user limit. You’ll get everything included in the Phone plan plus unlimited conference calls, video conference calls (up to four people), and unlimited internet fax.

RingCentral’s most popular plan is their Premium plan. This plan costs $34.99 per user per month and features everything in the Phone and Standard plans but with video conferencing for up to 100 people, 2,500 toll-free minutes per month, and automatic call recording.

Finally, there is the Ultimate plan, which will cost you $49.99 per user per month. The additional features you get with this plan include video conferencing for up to 200 people and 10,000 toll-free minutes per month.

“The call quality is very clear, and we can track all calls, along with the number and duration of each call that an employee makes,” says RingCentral customer Jared Weitz, who is the CEO of United Capital Source. “Running a business with a sales center makes this information vital to trend success and to learn where we can make improvements.”

Nextiva

VoIP provider Nextiva offers solutions for both small businesses and enterprise and comes jam-packed with features. The small business plan is called Communication Basic. Starting at $20 per user per month, Communication Basic provides unlimited calls, faxes, voicemail-to-text transcription, a toll-free local phone number, and an auto-attendant. There is also a reporting suite, and Nextiva promises customers 99.99% uptime reliability.

The next step up is the Communication Pro plan. This plan starts at $25 per user per month and gives you access to additional features like a desktop and mobile app, text messaging, conference calling, and the option to record a professional greeting. There is also a service-level agreement interface, reporting tools that allow you to track team performance, and the ability to send customers surveys over the phone. 

Finally, Nextiva’s enterprise plan boasts call recording, the ability to have voicemails texted to you, voice analytics, additional reporting features, additional surveys options, and the ability to add a live chat feature to your website. Furthermore, all Nextiva plans come with 24/7 support and month-to-month contracts. 

“We work better together since using Nextiva’s products to integrate all of our internal and external communications, leaving our employees feeling more empowered and successful at work,” says Nextiva customer Courtney King, owner of Teres Nail Bar. “And happy employees make for happy customers.”

Grasshopper

Grasshopper is the business VoIP provider of choice for entrepreneurs on the go. With Grasshopper, your mobile phone becomes a VoIP-enabled device and can perform a myriad of functions, including:

  • Unlimited domestic calling
  • Call forwarding
  • Call screening
  • Texting
  • Voicemail transcription
  • Custom greetings
  • Virtual fax
  • Auto attendant

The best part about Grasshopper is that these features are included with all subscriptions plans. The cheapest plan is the Solo plan, which comes with one phone number and three extensions for $26 per month. The next level up is the $44 dollar per month Partner plan with three phone numbers and six extensions. Finally there is the Small Business plan with five phone numbers and an unlimited number of extensions for $80. These prices are assuming annual billing; Grasshopper also offers month-to-month contracts, but your fee will be slightly higher.

Using VoIP to Grow Your Business

Switching over to a VoIP phone system can lower your monthly bills while increasing the functionality of your telephonic communications. RingCentral, Nextiva, and Grasshopper are all reputable business VoIP providers—but don’t just take our word for it. Sign up for a free trial and realize the power of internet phone service for yourself. 

Editorial Note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone. They haven’t been reviewed, approved, or otherwise endorsed by any of the companies mentioned above. Learn more about our editorial process and how we make money here.

Matthew Speiser

Matthew is a staff writer at Fundera. He has written extensively about ecommerce, marketing and sales, and payroll and HR solutions, but is particularly knowledgeable about merchant services. Matthew's writing has been published in Business Insider, The Fiscal Times, Best Company, and NJ.com, among others. Matthew was also a co-author for Startup Guide—a series of guidebooks designed to assist entrepreneurs in different cities around the world. He has a degree in journalism from the University of Delaware. Email: matthew.speiser@fundera.com.

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