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February 4, 2022

Why Some Businesses Still Choose PBX: Benefits & Cost

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A PBX allows employees to make, receive, and transfer calls outside of the building and amongst each other using different extensions. Many of the benefits that a PBX provides a company vary by the type of setup a business owner chooses. The cost is also determined by the type of setup. Below you’ll find a breakdown of the different kinds of PBX available, what benefits they offer, and their average costs.

A PBX, or Private Branch Exchange, is one of the most common phone system setups that small businesses rely on. It allows employees to make, receive, and transfer calls outside of the building and amongst each other using different extensions. Many of the benefits that a PBX provides a company vary by the type of setup a business owner chooses. The cost is also determined by the type of setup. Below you’ll find a breakdown of the different kinds of PBX available, what benefits they offer, and their average costs.

The two main PBX setups 

The on-site IP PBX set up is primarily made up of a closed-off network of telephones within a location. It allows employees to make, receive, and transfer calls internally and externally. The hardware is located on the premises of the company. An IP PBX setup has the capabilities to both make calls using the Internet and traditional lines. A VoIP (Voice-over-Internet Protocol) service allows calls to be made over the internet. 

A hosted PBX functions like the on-site PBX, except it does not require any equipment in the company building; all calls are made over the Internet. A provider hosts the PBX on a cloud. There is no need for a server, wires, or other hardware onsite. The only equipment that a business would need are VoIP-enabled phones, unless it already has them. VoIP-enabled phones are special phones that allow users to make, receive, and transfer calls over the Internet within and outside of the company. 

There are two main PBX phone system options for small businesses: onsite and hosted.

The benefits of each PBX system

An on-site IP PBX will usually have lower monthly costs after all expenses are paid for. There are no extra subscription fees or licensing costs. Many companies prefer to own their own phone equipment. Over time, owning the server results in a reduction in cost. 

Since the hardware is on premises, companies have more control over the phone system. Adding or removing a phone is simple, and open-source platforms allow for customized hardware configurations. An on-site PBX also allows you to keep your current phone service provider. Business owners may be satisfied with their current phone provider and prefer to stay with the same company. 

A hosted PBX system can be installed rather quickly. It’s also much less expensive to install than an on-site system. No equipment, other than VoIP phones, is required since the system is hosted either offsite in a third-party data center or in the cloud. A company could even choose to use a softphone, which is software that acts as a phone and allows users to make phone calls over the Internet. If their current phones support VoIP, companies can opt to keep those instead. This completely eliminates the need for any new equipment. 

IT support is included in the monthly cost of a hosted PBX system. Since there is no equipment such as servers or wires on site, there are no maintenance fees. A company needing IT help for their VoIP phones can get the help they need remotely. A hosted PBX also allows for remote working capabilities, which is a significant need for many businesses today. If a company plans on expanding, hosted PBX systems allow for rapid scalability. The VoIP provider simply adds on as many more lines a company would need. 

Why PBX continues to be the go-to

Small businesses choose PBX service providers, either hosted or IP, because of the extra features and phone lines they offer. Both setups offer many of the same features such as transferring, call parking, queuing, call forwarding, voicemail, and call recording. A busy company needs to have the ability to take more than one call at a time. Using a regular phone service would result in a constant busy signal for customers trying to reach their business. 

PBX systems give businesses the ability to set up a menu for incoming calls so that customers can essentially route themselves to the right department. This isn’t possible with a traditional phone set up, and using a menu improves the customer experience. PBX systems also allow you to have different settings for certain users. For example, one set of phones could have long-distance access, and another set could be restricted. 

PBX phone systems offer great flexibility for small businesses.

When compared to a traditional phone set up with wires connected to a phone box, PBX systems are much less expensive, especially when dialing long distances. PBX setups can use VoIP to make long-distance calls over the Internet. Standard phone lines could easily rack up high phone bills for long distances. Most companies would benefit significantly from those cost savings alone. 

Average PBX system prices

There are various factors that affect the cost of a PBX system. First, there is installation to consider. On-site IP PBX setups are usually more costly to install since they require the purchase of hardware and equipment and installation. On average, an on-site PBX system installation will cost about $800 to $1000 per employee. If a company needs over 50 extensions, the installation can easily cost over $100,000. For about 50 users, a monthly fee is about $1500, which includes hardware lease payments (if not purchased upfront), phone lines, outside maintenance costs, and more. 

Hosted VoIP installation generally only consists of the cost of how many VoIP phones a company is purchasing. This can run anywhere from $5 per user (if choosing a softphone) to over $100 per user. Many factors influence the pricing such as VoIP equipment, the plan you choose, and the number of users. Hosted VoIP fees are generally anywhere from $20 to $30 per user each month. 

PBX phone systems provide numerous benefits for small businesses that greatly improve the customer experience and agent workflow. The cost-savings alone, when compared to traditional phone lines, make the investment worthwhile. Both IP PBX and hosted PBX are reliable phone systems that continue to meet the needs of most small businesses.

What is a PBX system for small businesses?

A PBX system for small businesses is a closed-off network of phones within a company. It allows users to make, receive, and transfer calls via traditional phone lines and over the Internet. A VoIP service provider is needed to be able to make calls over the Internet.

Do companies still use PBX?

Companies still use PBX because it’s much more cost-efficient than a traditional phone setup. There are no extra charges for long-distance, multiple calls can be made and received at once, routing is available, and internal and external transfers are available.

How do I choose a PBX?

Choosing the right PBX setup and vendor depends on a clear outline of a company’s goals and bottom line. Important factors to consider when choosing a PBX include remote capabilities, plans for expansion, areas for improvement, call volume, customer satisfaction scores, and cost. Since each setup and vendor combination varies, a thorough evaluation of each advantage and disadvantage is warranted, along with a close analysis of which vendor and setup is most aligned with company goals.

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About LiveVox

LiveVox (Nasdaq: LVOX) is a next generation contact center platform that powers more than 14 billion omnichannel interactions a year. By seamlessly unifying blended omnichannel communications, CRM, AI, and WEM capabilities, the Company’s technology delivers exceptional agent and customer experiences, while helping to mitigate compliance risk. With 20 years of cloud experience and expertise, LiveVox’s CCaaS 2.0 platform is at the forefront of cloud contact center innovation. The Company has more than 650 global employees and is headquartered in San Francisco, with offices in Atlanta; Columbus; Denver; New York City; St. Louis; Medellin, Colombia; and Bangalore, India. To stay up to date with everything LiveVox, follow us at @LiveVox or visit livevox.com.

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