How to get a Low Cost Phone Connection for your New Start-Up Business

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When considering launching a new business, it is vital that you put in place a business telephone connection that can grow with your business but which doesn’t saddle you with high overhead costs during the start-up phase.

Thankfully, with the internet telephony sector growing, there are now a number of options available to new business owners. This article runs through the pros and cons of each of these options.

Fixed Business Telephone Line
This was the only solution available to business owners up until recently but it is costly solution with new BT business phone lines involving a £125 installation charge, monthly line rental charges of £22.50 per month as well as call charges of 5p per minute. Thankfully, there is now more competition in the fixed line marketplace from other telecom providers such as Virgin, Talktalk, Plusnet etc but all still involve a monthly line rental plus call charges.

Using Your Existing Mobile Number

For many small businesses, this is the default option selected by many new business owners. However, it has a number of drawbacks:

• Many customers will be put off contacting a business which only has a mobile number
• Customers are likely to continue to call outside of working hours interrupting non-work life.
• It is difficult to present a professional business image to customers as it isn’t easy to differentiate between customers and personal callers when answering calls.
• As the business grows, the business owner will become increasingly inundated with calls introducing a bottleneck and impacting on business growth.

For these reasons, this option is not recommended except for sole traders who like to deal personally with all customers and do not anticipate a need to expand their business.

Virtual Phone Numbers - Call Re-Direction Services

There are now a number of telephony suppliers offering geographic (ie. 01 or 02) or 0800 phone numbers which automatically re-direct calls to your mobile or home phone. This option offers the following benefits:

• Builds trust and credibility with customers as the business has a traditional-looking local phone number which customers will know how much it costs to call (not 0871 etc).
• Avoids the need for an expensive fixed business line
• Low monthly charges (from £0.99 per month) plus call costs for each call re-directed (typically 5.5p per minute to mobiles). Some suppliers charge a higher monthly fee but include more re-direction minutes.
• Calls can be re-directed to a mobile number, home phone number or to a hosted voicemail service which automatically sends an email to the business owner with a recording of the message.
The disadvantages are:
• If you miss a call and need to call a customer back, the customer will see your mobile or home phone number (CLI) on their phone when you call them back (unless you hide your caller id by using 141). If this is likely to be a problem, in the medium term, you could upgrade your phone connection to a VOIP service and use a VOIP phone to call the customer back (see below).
• If a large number of calls are received, the call re-direction charges can mount up over the course of the month. However, if this happens, it is probably then sensible to upgrade to a VOIP phone connection (see below). Many re-direction suppliers offer this service.

Business VOIP Phone Line

As with virtual phone number/call re-direction services above, it is possible to buy a geographic (ie. 01 or 02) or 0800 phone number and then get this re-directed to a Business VOIP (or Voice Over Internet Protocol) telephone connected to your home broadband internet connection. This option works well for start-ups in areas where there is a fast broadband service - working particularly well on SuperFast Broadband connections which avoid the contention associated with traditional copper-wired broadband. VOIP connections typically involve a higher monthly charge than a simple call re-direction service and there is a need to purchase a VOIP phone (typically around £50 - £70) which connects into a USB port on your computer.

However, there are a number of advantages to using a VOIP service:

• Incoming calls are free to receive if answered via a VOIP phone (compared to being charged for if answered via a mobile or home phone when using a re-direction service)
• The call charges for making outgoing calls from the VOIP phone are typically much lower than calls made from a fixed business line. Some suppliers charge a fixed monthly fee (some as low as £4.99 per month) and offer free outgoing calls.
• As with virtual number/call re-direction services, hosted voicemail is usually offered as standard for handling missed calls.
• Customers receiving calls from your business will see your business phone number as the Caller Line Identification (CLI) when the VOIP phone is used to call them.
The disadvantages are:
• Possible clarity/reliability problems if operating on slow broadband internet connections. If in doubt, please discuss this with your prospective supplier before signing up for a business VOIP service.

What to Watch Out for When Comparing Suppliers:

Upgrade Path – Many virtual number/call re-direction suppliers offer the ability to upgrade to a VOIP service at a later point if call volumes increase but check before signing up to a call re-direction service to avoid the need to change your number at a later date if no upgrade is possible.

Number Portability - Only BT is forced by regulation to transfer numbers to other telephone providers – a process known as porting. It is therefore important to check that your number provider has number porting agreements and will allow you to take your number to a competitor if you wish to.

Contract Length – Some suppliers tie you into 12 or 24 month contracts which may could involve ongoing costs in the event that the start-up is unsuccessful. Try to find a supplier with a rolling monthly contract with no ongoing commitment.

Inclusive Call Packages – These are useful if the business is definitely going to be an extensive phone user. However, for most start-ups, this is unlikely to be the case initially so it may be best to select a supplier which offers cost-effective call charges and then move to an inclusive call package at a later point once call volumes are known.

Pricing – Consider the quality of support offered as well as price. Contact their customer services team to find out more about the quality of technical support that they offer before making a final decision.

This blog article has been written by DML Consulting Limited, a business consultancy based in Kingsbridge, South Devon. DML Consulting offers simple, practical and jargon-free solutions to the typical problems faced by start-up businesses. If you would like to find out more about business telephony or would like help with other aspects of your business, please contact us for a Free 1 Hour

David Laity
DML Consulting Limited