Types Of Business Phone Systems

Learn how to decide which phone system is best to choose for your business.


Business phone systems provide solutions for businesses that are not possible or practical with traditional phone lines. The business phone systems you choose for your company should include the following features:

  • Multiple lines to manage high call volumes
  • Visual voicemail; transcribing and voicemail to text
  • Conference calling
  • Call forwarding to a cell phone or even an email
  • On-hold messages and wait music
  • Handset & Headset support 

In this article, we talk about what to look for when choosing a business phone system:

  • What are the 3 types of phone systems?
  • What is the average cost of a business phone?
  • How often should you upgrade your phone system?


VOIP business phone system

What are the 3 types of phone systems?

Key System Units (KSU)

The most basic phone system is one that uses the key system unit (KSU). This type of system is only suitable for small businesses with no more than 40 employees working as phone operators, given the limitations on the number of phone lines it can incorporate.

It’s an easy-to-use system, comparable to a home telephone. It has all the essential features a business will need; however, it lacks portability and flexibility. It uses a central switching device – the KSU – to manually determine the phone-line selection.

The variation of this system is called KSU-less. It has the same phone capabilities as the basic system, but it is portable and flexible, as it does not use the central switching unit, and is completely wireless.

The KSU-less system has some severe limitations, though. It only allows for approximately 10 phone operators, and it’s not sold commercially – you must specifically request it from a phone system provider. A KSU-less phone system is ideal for a very small business that doesn’t intend to expand its workforce, but it’s not that useful for small businesses looking to grow.

Pros and cons of a KSU

It’s intuitive and easy to use.It’s limited to 40 phone lines.
It has all the basic telecommunications features a business needs.It’s not portable or flexible.
You can manually determine an appropriate phone line.It doesn’t offer the versatility growing businesses need.

Private branch exchange (PBX)

A private branch exchange (PBX) is another business phone system option. This is a more advanced system than the KSU and KSU-less systems. It uses programmable switching devices, enabling the automatic routing of incoming calls.

This type of business phone system is suitable for a company with 40-plus employees, as it’s largely automated. Another significant advantage of the PBX system is that it features an uninterruptible power supply, allowing a business to remain functional without electricity for some time.

A modification of this system is the hosted PBX. The only difference with this system is that the programmable switching device is no longer installed on-premises – it’s hosted by a telephone provider. The main advantage is that you’ll avoid some of the installation and maintenance costs involved with the standard PBX system without losing any of the advanced features it has to offer.

Pros and cons of PBX

It can automatically route incoming calls.A dedicated team is required to manage your PBX configuration.
It can serve companies with a large number of employees.Your business is responsible for all maintenance.
It has a dedicated power source to stay up and running during electrical interruptions.Redundancy issues can occur between worksites.

Voice over Internet Protocol (VoIP)

One of the newer and more popular innovations for businesses is Voice over Internet Protocol (VoIP). This is the most advanced system by far, allowing a potential client and phone operator to communicate even if the two are in different countries. It requires the use of both the internet and a computer. However, it’s also the most expensive system, with the cost determined by the number of employees who need to use it. The main benefit of this system is that all its functions are accessible by computer via your company’s business internet network.

Similar to PBX, the VoIP system can be hosted. The hosted version offers the same advantages as the basic VoIP system, with less installation and maintenance involved for the business using it, since the service provider hosts the central telephone system.

Pros and cons of VoIP

A wide variety of devices allow increased accessibility for communication.A stable internet connection is required, limiting when and where you can use it.
You can use the internet to easily communicate from anywhere around the world.Latency and bandwidth issues could create delayed or frozen communications.
It’s easily scalable to enable communications between more teams.Devices can be targeted for cyberattacks, but there are ways to protect yourself.

What is the average cost of a business phone?

Any service has varied costs, though, and business phones are no different. Some factors affect the cost of business phone lines more than others. The biggest factor is the number of lines. For larger businesses, bundled line services are an option. For smaller businesses, each new line is a multiplier on the monthly cost.

The type of phone service also matters. Traditional landlines do not run at the same cost as VoIP services. Whether you can hold teleconferences and video conferences, store messages, and access other popular communication mechanisms will impact the price per line (or per user). Special features such as answering services, mobility services and extra support can also drive up the price of a business phone.


How often should you upgrade your phone system?

Usually, To prevent maintenance problems and ensure that the business is operating with the latest upgrade in systems, an update should happen every two years.

However, to keep your costs down – here’s how to tell when you need a business phone system upgrade:

  • If it ain’t broke don’t fix it! You can hold off on an upgrade until your phones start to show consistent problems. This can slow the average upgrade time to every five years.
  • A new feature will make a significant difference for your business operations. Although an upgrade costs money, your overall return may be higher if you add a feature that either reduces multiple services, or increases productivity.



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