Guide to Choosing the Right Phone System

Count every business phone line you'll need — then double it

Wiring is a big issue. If you are leasing pre-wired space, this is done, but you might need to add lines — which means construction cost. An upgradeable business phone system might be for you. Also, everything hooked to a phone is a line, including modems and credit-card terminals. Don't undercount!

I recommend: HelloDirect.com, a great business telephone systems and equipment vendor for small business, has a tutorial on basic office wiring do's and don'ts.

Attack of the acronyms: PBX and KSU

The "right" phone system isn't that easy to identify, but some initial definitions help sort out where you should be headed.

I recommend: In order of cost-per-user, high to low: PBX is Private Branch Exchange, the phone systems you are used to encountering in the corporate world. Tons of detail on this at Wikipedia. KSU is Key System Unit, a cheaper version of PBX technology (the breaking point is 60 employees or less), says vendor Phone-guys.com. Why would you buy (or avoid) a KSU system? They're cheaper, but vendor Phone-system.com explains the limitations blow-by-blow. A third variety, known as KSU-less systems, gets you by without a big hardware box, and experts recommend this option for 10 or less employees.

Make the call from your data lines

Voice over Internet Protocol (VoIP), making calls via Internet, is an interesting path if you have high-speed Web. Internet-enabled phones have come a long way from clunky PC-based systems. Now, you can have a nice handset on your desk and still make cheap calls over the Net using your existing Internet. Most integrate with your e-mail and mobile services, too.

I recommend: Cisco has a handy calculator that helps you figure out if the move from a standard PBX to an Internet-based business telephone system is worth it when you renew. Other major vendors include Lucent, Nortel and Avaya, although if you have less than 100 "seats," in IT parlance, you'll probably be buying through a local reseller.

Chuck it all and go virtual

Thanks to ubiquitous broadband, small businesses can now choose to do away with the hardware and software of commercial telephone systems and simply rent the service through online vendors.

I recommend: RingCentral, VirtualPBX, GotVmail, Freedom800, and VoiceNation offer plans ranging from $10 a month and up, depending on how many minutes you will use and how many services you add, like voicemail and forwarding, for instance.