How To Set Up a Phone System for Small Businesses?

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Today, a phone system is no longer a luxury but a necessity for any small business. Imagine a potential customer calling your company and finding out your network connections are down. Not a great first impression, right?


A well-equipped phone system can transform how you handle customer interactions, boosting your professionalism and efficiency. It also enables efficient call handling, fosters robust customer relationships, and supports business operations.

What is a Small Business Phone System?

A small business phone system is a set of technologies designed to manage and improve call handling. The system includes features like voicemail and call forwarding to meet the needs of modern sales and customer service teams. It also supports multiple calls at once and directs them appropriately.


Over the years, business phone setups have changed a lot. Today's phone systems have a huge difference in technology and features compared to their predecessors.


Many businesses now use VoIP (Voice over Internet Protocol) systems to boost efficiency and professionalism and improve communication with customers and within the team.

Why Do You Need a Phone System For Small Business?

Small businesses require a phone system to project professionalism and improve customer service. It streamlines internal communication, improving efficiency and collaboration among employees.


A modern phone system offers features such as call forwarding, voicemail, and conferencing, which are crucial for smooth operation. Additionally, they support scalability, allowing the system to grow with the business.


Cost-effective solutions like VoIP can reduce expenses, especially for long-distance calls. Systems that are cloud-based support mobility facilitate remote work, and maintain business continuity.


Overall, a robust phone system is key to maintaining effective communication, improving customer satisfaction, and supporting business growth.

Types of Small Business Phone Systems

Small business phone systems come in various types to suit different business needs and communication styles. Setting up a small business phone system requires careful selection, and each system has its own unique benefits and limitations.

Traditional Landline Systems

Traditional Landline Systems are conventional phone systems that operate using the copper wiring of telephone networks. They are reliable and time-tested but lack the flexibility and features of modern systems.



  • Reliability 
  • Familiarity
  • No internet dependency



  • Lack of flexibility 
  • Less scalability 
  • Expensive to install and maintain

VoIP Systems (Voice over Internet Protocol)

VoIP systems use the Internet to make and receive calls. It is Ideal for businesses looking for flexibility, advanced features, and potential cost savings.



  • Low setup and call costs compared to traditional landlines.
  • Scalability
  • Advanced features include virtual meetings and other digital integrations



  • Internet dependency 
  • Vulnerable to power outages

PBX Systems (Private Branch Exchange)

A PBX system is a private network for internal and external communications within a business. It can be traditional, hosted, or IP-based and provides features like call routing, conference calls, and call queue management.



  • Offers complete control over the system and its security
  • Highly customized to fit the exact needs of the business



  • Higher upfront costs for equipment and installation
  • Requires regular maintenance and updates
  • More challenging to scale or update

Cloud-Based Systems

Cloud-based systems are hosted on the provider's servers, offering scalability and flexibility without physical hardware. With cloud-based business phone systems, your service provider maintains and upgrades your PBX technology, allowing you to add lines easily and receive quick access to updated features.



  • Requires minimal on-site hardware
  • Flexibility and Scalability
  • Ideal for supporting remote workers


  • Involves regular subscription fees
  • Relies on the provider's security measures

How To Set Up a Phone System for Small Business?

To set up a phone system for your small business, assess your needs and choose a system type (landline, VoIP, virtual, PBX, hybrid, or cloud-based). Select a provider, install and configure the system, train your team, test functionality, and then go live, adjusting as necessary for efficient communication.

1. Identify Your Business Needs

Evaluate how many employees need phone access and the type of calls your business handles: local, long-distance, or international. Determine the features required, such as voicemail, call forwarding, call waiting, interactive voice response (IVR), conferencing, and call transfer capabilities.

2. Choose a Phone System

Choose the phone system that can quickly scale up as your business expands. Based on your needs assessment, decide which phone system fits your business: traditional landlines, VoIP, PBX, or cloud-based systems.

3. Select Your Provider

Choose a provider that meets all your business phone requirements, from managing multiple phone numbers to enabling 3-way calls. Many providers offer interactive demos, allowing you to explore their platforms before committing, which is a great way to compare features and evaluate customer service without making an immediate investment. This approach helps you make an informed decision by assessing various options.

4. Choose Your Business Phone Number

Selecting the business phone number is a crucial decision. Opt for a number that's easy for customers to recall, such as one with repeating digits or one that relates to your business somehow.


If you already have an established business number, you can transfer it to the new system through the number porting process (only applicable for VoIP phone systems). Additionally, using a virtual phone number can give your business a global presence, making it accessible to customers worldwide.


📢Learn More: How to Get a Business Phone Number? 3 Easy Steps

5. Test Your Network and Internet Connection

Check your internet connection before installation. A stable internet connection is crucial for high-quality VoIP phone calls. Low Bandwidth can lead to interrupted service, echoes, and other issues that can frustrate customers and the agents handling the calls.

6. Plan Your Setup

Before installing, map out your phone system infrastructure. Determine where to place each piece of equipment and how it will connect within your network. Plan the layout of phone units across workspaces and ensure you have essential components like headsets, cables, and network access points.

7. Install The Equipment

Proceed with the actual installation of your phone system’s hardware and software. If you use a traditional system, install phone lines, handsets, and the central unit. Set up routers, modems, and IP phones for VoIP or cloud-based systems and ensure they're correctly connected to your network. Ensure all devices are tested and functional before proceeding to the next step.


👉Learn More: VoIP Equipments: Devices Required To Make VoIP Calls

8. Configure The System

Configure the phone system, set up user accounts, assign extensions, and customize settings like call forwarding, ring groups, and voicemail options. Configure VoIP systems' IP addresses and network settings to optimize call quality and security.

9. Train Your Team

Educate your team on using the new system, including making and receiving calls, utilizing voicemail, and employing advanced features like IVR or conference calls. Provide manuals or quick reference guides to help them adapt quickly.

10. Test The System

Before going live, thoroughly test the phone system. Make several test calls, including internal, local, long-distance, and international, to check the sound quality and functionality of all features. Pay attention to any delays, echoes, or quality issues.

Factors To Consider Before Setting Up A Business Phone System

There are some key factors you should consider before setting up a business phone system to ensure that your phone system becomes a powerful tool rather than a hindrance to your business growth.

Type of Phone System

Be familiar with the types of business phone systems. Selecting a phone system that aligns with your operational needs and business growth will be easier.

Size of your Business

Every business may have different communication requirements and operational needs. A small business may require a different phone system than a large-scale business. Choose a phone system that caters to your specific business needs and size.


Cost is an essential factor while setting up a business phone system. A phone system with a higher upfront cost may justify the initial investment with greater ROI and savings in the long run, with its reliability and efficiency.

Integration with Existing Tools

It is essential to choose a system that is compatible with your existing tools. Traditional systems offer limited compatibility compared to VoIP. VoIP can integrate with CRM and other business tools, enhancing productivity and expanding the functionality of your system.

System Maintenance

Analyze the upfront costs and the long-term expenses of different phone systems. While VoIP is cost-saving with lower upfront costs than PBX, it is also essential to consider the total cost of ownership and maintenance.

Support Service

Get a phone system from a service provider that backs you with full-time support. With support and assistance, you can solve the issues quickly and minimize the downtime for better customer service.


Your communication needs increase along with your business growth. Consider a phone system that adapts to your changing needs, whether scaling up or down.


Traditional phone systems offer limited features compared to VoIP. To enhance your business communication, consider a VoIP system that provides advanced features to streamline operations and improve customer engagement.

Set Up Your Business Phone System Today

Whether you're a small startup or a growing enterprise, a well-designed phone system can support your business needs and scale as you expand. Calilio offers a modern phone system solution for businesses of all sizes.


Calilio offers advanced VoIP communication features, including a unified call box, chat reminders, internal messages, IVR (Interactive Voice Response), and call routing to upgrade your business communication.


Furthermore, our exceptional support team will guide you to ensure a hassle-free transition to our VoIP business phone system.

Start optimizing your business operations with Calilio today. 

Frequently Asked Questions

What is the best type of phone system for a small business?

The best type of phone system depends on your business needs. VoIP systems are popular for their flexibility and cost-effectiveness. Cloud-based systems are excellent for scalability and remote work, while traditional landlines offer reliability for businesses with stable infrastructure.

How much does it cost to set up a business phone system?

The cost varies based on the type of system and features you choose. VoIP and cloud-based systems typically have lower upfront costs and monthly fees, whereas traditional landlines and PBX systems may require higher initial investments in hardware and installation.

Can I keep my existing business phone number?

You can usually keep your existing business phone number by porting it to your new phone system. This process is available with most VoIP and cloud-based providers, including Calilio.

What features should I look for in a business phone system?

Call forwarding, voicemail, conferencing, interactive voice response (IVR), call recording, and integration with other business tools are key features to look for. These features enhance communication and improve customer service.

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