Determining Financing Options to Buy Your New Business Phone System
Common Asked Question
Investing in a business phone for every member of your team can be a big undertaking, especially if you have never had a phone system of any kind before. Having a landline for each of your employees can be a significant investment, but it is often one that will pay for itself over time. However, the up-front cost of having this type of system in place can be intimidating.
The cost of your new business phone system will depend a great deal on which type of set up you would like to use. For example, if you have just a few employees and do not necessarily need to set up a landline, your system will look very different compared to a business that has an office setting with many employees.
Each business has different needs when it comes to setting up and utilizing a phone system. Whether you want specific add-on services and even how often your team will use the phone will often have an impact on how much your system can cost.
The Number of Users
The number of phone systems you have will have a huge impact on the price tag for your phone system. Do you need a system for every person? What about all departments? Would it be a good idea to get phones for common areas and conference rooms? Does each phone need access to send and receive calls outside of your company? Or, would internal calling work better for your team?
The number of units and the location of your phone system will affect the bottom line because it may also require that you increase set up costs as well.
Site Locations
If your company is centered in one building or portion of a building, then your phone set up will likely be less expensive compared to getting the same system in several locations. Connecting multiple locations to the same system is certainly possible, but as the number of locations increases, the price will often also go up as well.
Phone Models and Features
The model of the phone and the various features that you would like each model to have will increase your per-unit price. If you have many units, then even smaller features can end up significantly increasing the total cost.
If you include services like conferencing, call forwarding, incorporating call centers, or integration with other services, then those types of add-on features will usually increase the prices as well.
Some of the most common add-on features include things like:
- Conferencing
- Increase mobility
- Interactive Voice Response (IVR)
- Enhanced 911 services
- Integration with internal systems, including CRM (Customer Relationship Management) and ERP (Enterprise Resource Planning)
Features are slightly different compared to an add-on because they may have more to do with the type of equipment you have compared to adding on a service. Features like call transfer, call waiting, and holding may not be available on specific business phone systems, but they might come standard on others.
Training and Maintenance
Depending on the system that you choose, you may need to also invest in training for your employees so that they know how to use their new business phone system properly. Ongoing maintenance can also be expensive for larger set-ups as well.
When you buy a business phone system, you also need to think about your various options to pay for the system. If you have excess capital or your business phone system is on the smaller side, you might be able to purchase your new business phone system outright. When you do this, you are generally just purchasing the equipment itself, including things like:
- The actual phone unit or units
- Headsets and other handsfree equipment
- Intercoms or larger speakerphone sets
The ongoing monthly costs for your services will not require a larger up-front commitment, unlike your physical equipment. While the start-up costs can be high, having a lower monthly payment that only addresses services rather than the equipment can be appealing to some business owners.
Financing Your Business Phone System
If you want to finance your business phone system, you can do this in several ways. Some of the most common methods to finance the phone system purchase include:
- Financing through a lending institution, such as a bank or credit union, or utilizing a small business loan through the SBA
- Setting up a payment plan through your vendor so that you pay off your system over time
- Creating a loan arrangement directly with your vendor to purchase the equipment
The right choice for your business may depend on where and how you can get the best interest rate for this type of arrangement.
Leasing Your Business Phone System
You can also choose to forgo owning the system outright and choose to lease a business phone system instead. In a lease arrangement, you add the cost of the lease to the overall monthly maintenance and services costs for your equipment. Some companies will allow you to lease your new phone system with no money down.
Leasing may make sense if your company is not sure how much it will use the phone system, and you want to try it out for a limited period. Your company can expense the lease on a regular basis, as well, which may be appealing based on the financial structure of your company. Tying up cash in a large equipment purchase may not be a sound business decision for the type of company you have or the season in which your business is operating.
Many vendors will also create a lease-to-own arrangement with you so that you lease for a period of time but will own the system outright if you continue to make ongoing lease payments for a set amount of time. These lease-to-own arrangements can last several months, or they may extend over several years.
Owning the equipment at the end of the lease may be appealing to some companies, and having the flexibility to end the lease at any time may be desirable as well. A lease-to-own arrangement essentially provides the best of both worlds if you are interested in those benefits.
Renting Your Business Phone System
If you want a more temporary solution, renting the equipment you need for your phone system may be a good idea. If you are in a temporary space, working on relocating or expanding, or you are concerned that the current system may not meet your needs in a year or two, renting a business phone system may be a good option for you.
Like a lease, renting your phone system will likely be charged on a monthly basis with your monthly service fees. Keep in mind, however, that renting may end up costing you more in the long run if you plan to rent for an extending period of time.
In some limited situations, you may be able to utilize refurbished or used equipment to cut down on the overall cost of your system.
While refurbished equipment will save you money upfront, this equipment is more likely to have problems or become obsolete from a technology standpoint faster than getting one of the latest systems. However, if you are newly starting out, getting any phone system in place may be better than none at all.
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