Small Business PBX: Essential Phone System Guide

Jim Gustke profile image March 20, 2021 | 6 min read

What is PBX?

It’s not to be confused with the PBA, the Professional Bowlers Association, or PB&J, as in a peanut butter and jelly sandwich, or PBS, the Public Broadcasting System.

PBX stands for private-branch exchange, and it describes business phone systems that allow transfers between extensions within a company and other advanced features. Any business with more than one employee can benefit from a PBX phone system.

However, not all PBX systems are created equal. There’s a variety of features to consider, and different PBX types are suited to different situations.

If you’re just getting started, this guide to small business PBX systems can help you know what your options are and what things you should consider.

woman sitting at desk holding a phone to her ear Monkey Business –

What Type of PBX Phones Are There?

Choosing the best PBX phone system for your small business means understanding the two categories of phone systems.

  1. Traditional PBX: This classic multi-line phone system is used by businesses to deploy a network of phone lines with business features such as call transfer and call hold.
  2. IP-PBX: Sometimes called a hosted PBX or virtual phone system, these systems have the functionality of a traditional PBX. However, the underlying technology transmits calls via your internet connection.

These cloud phone systems bring the advantages of VoIP to the framework of a business phone network.

Which PBX Phone System Is Best for Small Businesses?

At one point, traditional PBX business phones were the only option. However, IP-PBX phone systems have become the preferred phone system. This shift is a natural evolution of businesses discovering that with hosted PBX, they can pay less and get more.

In the past four years, the number of businesses using virtual PBX has more than doubled! When deciding between PBX and IP-PBX, here’s how to determine which phone system is right for you.

Choose PBX if:

a. You’re not confident in your internet connection stability.
If your business is in a rural area with spotty or unreliable internet, you may benefit from using an aging landline phone system rather than depending upon your internet connection for your phone service.

b. Your business provides critical emergency communications.
Internet-based phones can be set up with the backup systems so that you’re prepared for utility outages. For example, call forwarding can help you to never miss a work call. However, lo-fi landline phones still tend to be preferred for emergency service providers.

Choose IP-PBX if:

a. You’d like to spend less on phone service. The cost savings is one of the strongest motivating factors for businesses that switch to business internet phone service. A traditional PBX can cost as much as $1,000 per employee, requiring on-site hardware purchases and professional installation.

However, an IP-PBX system has an average monthly cost of just $25 to $30 per user. Ooma’s small business phone system users save even more, paying only $19.95 per user with unlimited minutes, no contracts, and no installation cost.

b. You don’t want to be responsible for hardwiring.
With a cloud-based phone system, your phone provider takes care of the maintenance, so you don’t have to. This means that your small business can avoid complicated on-site phone switches, and in many cases, all you need is a power outlet to add a new phone. 

c. Your business needs flexibility and scalability.
In today’s fast-moving workforce, your small business infrastructure needs to remain flexible to operational demand. For example, you may start to quickly add new employees, you may take on remote workers such as an off-site sales agent, or you may begin offering a work-from-home option to trusted staff.

The technology powering IP-PBX helps you to remain flexible and adaptable. New lines can be added easily, and the technology helps employees stay connected across many types of circumstances.

man sitting at desk holding a cell phone to his ear goodluz –

What PBX Phone Features Should You Look For?

When it comes to features, IP-PBX phone systems usually win out over traditional PBX systems. That’s because the technology makes it easier for companies to go high-tech with their offerings. Whatever type of phone system you’re considering, be sure to check for these business phone features:

    • Unlimited Minutes: Phone calls are essential to business success, and you don’t want to be restrained by monthly call limits or be caught with a steep bill because your staff went over. Look for business phone plans that include unlimited minutes, and if your business is working globally, be sure to also look for low-cost international rates.
    • Calling Essentials: Some business phone systems are heavy-handed about selling bells and whistles. However, their phone plans don’t include the basics. For example, voicemail is an essential part of phone service, but Comcast wants to charge businesses extra for it. Make sure that the phone plans you’re considering include the essentials of phone service.
    • Mobile App: Business phone providers such as Ooma lets users stay connected even when they’re not at their desk. With the Ooma Office free calling app, employees can use their cell phone to receive incoming work calls, make outgoing calls using their business phone number, transfer calls to coworkers, check work voicemails, and do much more.
    • Auto Attendant: You don’t have to be a big business to automate your phone calls. With an integrated virtual receptionist, incoming calls can be automatically routed to a staff member, department, or even a pre-recorded message. Especially for small businesses, a smart phone system with call automation can feel like you’ve added an additional staff member.
    • Unified Communications: Communication today means that we rapidly shift between communication types such as making a phone call, leaving a voicemail, and sending a text message. By unifying text messaging with your business phone service, you’ll have the flexibility to communicate however is most convenient.


  • Call Center: If your small business is on a rapid growth trajectory, you may want to plan for features that you expect you’ll need. For example, the Ooma Enterprise Call Center can help you manage large call volumes as well as data-based analytics and call routing.

What Makes Ooma the Best PBX System for Small Businesses?

Here’s why Ooma Office business phone service is trusted by countless small businesses:

  1. Savings: High-quality business phone service doesn’t need to break the bank. For small businesses and startups, costs are especially important, and when we did the calculations, a business with three users that switched to Ooma would save more than $6,000 over three years. Use our savings calculator to see how much you can save.
  2. Award-winning: We think Ooma Office is great, but don’t just take our word for it. For the past nine years, Ooma Office has been named the #1 Small Business VoIP system in PC Magazine’s Business Choice Awards.
  3. Easy to Use: With plug-and-play technology and a user-friendly web portal, Ooma Office’s phone service is easy to use. From set-up to administration, businesses can spend more time using their phone and less time configuring it.
  4. Professional Features: The rich set of features included with Ooma Office give you the high-tech tools to be professional with customers and improve office productivity so that you can grow your business.
  5. Avoid Headaches: It’s common to be frustrated by big telecom companies with their poor customer service and difficult-to-understand policies. Instead of the runaround that you get with big telecom companies, Ooma can help you avoid headaches with 24/7 support that’s available by phone or chat.


  Learn more about how Ooma Office is providing enterprise-grade phone service at a small business price.

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