How hosted telephony can work for small businesses

Why small businesses should move their telephony system to the cloud.

Here, Matthew Guise of Callagenix Ltd discusses why small businesses should move their telephony system to the cloud.

One of the big advantages small businesses have over their larger, more established competitors is their agility. They can change strategy and direction quickly, where a larger organisation might need months of planning and endless meetings before they can change course.

A useful business tool to support this agility is a hosted phone system.

What is hosted telephony?

Hosted telephony is similar to a regular phone system, except all numbers and services are hosted in the cloud.

With a traditional phone system you have a phone number, which is tied to a specific physical location. You also need pbx hardware (a switchboard) to handle all your extensions and dictate how your calls are handled. The options available to you depend on the budget you have for your pbx.

Hosted numbers are different as they sit in the cloud and are not tied to a specific location. With a hosted number you can divert calls to any other landline, mobile or international number. You can instantly change this destination number as often as you want through an online control panel.

Hosted services also sit in the cloud and are linked to a hosted number or numbers. They range from the simple (call divert, answerphone, fax to email) to the sophisticated (virtual switchboard, group divert, time of day, etc.) and can be combined in any way to build a custom phone system based upon the exact needs of your business.

How hosted telephony helps a small business stay agile

  • It expands and contracts with your business

Hosted services are very flexible and scalable, perfectly adapting to your changing needs. It only takes a couple of minutes to update them, leaving you free to focus on the important stuff in your business.

With hosted telephony you can quickly and easily add or remove numbers, extensions and services to match your requirements.

If business takes off, it’s simple to add new staff to your systems as soon as you can hire them. Your virtual pbx can easily handle it, whereas a traditional pbx may limit your options until you source and buy a new one.

Similarly, if you’re running a seasonal business and only need the extra extensions for a short period, this is easy to manage without having a phone system that’s much larger than you need the rest of the year.

If you want to run a new marketing campaign and track results so you can see if it’s working, one option is to set up a new phone number. You can monitor how many calls come in on this number, whilst still having it integrated it with your existing phone set up. You may even want to send those calls only to specified staff members. As soon as the campaign is over, it only takes a minute to change things back to how they were.

  • It’s location independent

As a business grows, it will likely reach the point where a change of premises is required. With a hosted system this is easy to handle – the phone number stays the same, all that’s required is that you update your new destination number when you move. If you have any problems during the move, you can always temporarily divert calls to another landline or mobile number to make sure you don’t miss any calls.

This flexibility also makes it easy to accommodate staff who sometimes work from home, or staff who are regularly out on the road. You can assign them an extension and have calls automatically routed to wherever they are, whether that be at their desk in the office, at home, or on their mobile. There’s no need to play phone tag or guess which number to use.

Should you ever open new offices in different towns, you can still manage all your numbers, extensions and services in one place. You can link all your sites together through a single virtual switchboard to enable staff to transfer calls through as if they were in the same building.

  • It has baked-in business continuity 

With a hosted system you also have an element of business continuity planning built in. Should you ever be affected by a disaster, such as a fire, flood or anything else, your phone system will not be brought down.

With a physical phone system you are vulnerable to disaster, as it is tied to a specific phone line and physical pbx hardware. With hosted telephony you can quickly divert all calls to another landline or mobile if you can’t access your premises for any reason. It’s also simple to set up a recorded information message, or send out bulk SMS messages to let staff and clients know what’s going on.

Many small businesses never recover after being affected by a disaster. Whilst you can’t guarantee it will never happen to you, it pays to take steps to ensure you can communicate with your customers and continue to serve them, should the worst ever happen.

  • It is cost effective

Another attractive factor for small businesses is that hosted services are very cost effective when compared with traditional phone systems.

The main cost saving is due to there being no initial outlay on pbx hardware. This can be expensive to buy, maintain, repair and ultimately replace. In comparison, a virtual pbx does not come with any up-front cost, doesn’t need to be maintained and repaired and never needs to be replaced.

Hosted service providers are usually able to offer cheaper inbound call charges than the larger phone providers, such as BT. 

All this means lower bills and more money available for you to invest in growing your business.


If you want to further reduce your costs, it may be worth looking at a business grade VoIP (Voice over Internet Protocol) service to route your calls over the internet. All-inclusive packages are also available, providing you with a dedicated VoIP broadband connection, all the equipment and handsets you need, and all your calls included for a fixed monthly payment.

Business grade VoIP services rely on a good internet connection, so may not benefit businesses in rural areas with a poor broadband speed. Where the connection is good, business grade VoIP offers a reliable service with call quality indistinguishable from a regular service, indeed, many ‘regular’ calls are now routed over the internet at some point. 

Further reading on cloud

Ben Lobel

Delphine Hintz

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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