Editor’s note: Russ McGuire is the online director of Business Reform Magazine. Each issue of Business Reform features practical advice on operating successfully in business while glorifying God.

Telephones have become the lifeblood of American business. However, since local telephone companies have historically subsidized residential services by charging high fees for business lines, telephones can also sap the cash out of your business. Technology advances may offer alternatives that you may not have yet considered for your business.

Historically, small and medium businesses have had to make a hard choice in providing telephones to their employees. One approach is to buy a phone system. This has relatively high upfront cost (typically $500 – $1000 or more per employee) but can significantly reduce monthly phone bills since a smaller number of lines from the phone company are shared by all of the employees (it’s not unusual to have a 5:1 reduction in phone lines, and even greater reduction in monthly cost since the required lines don’t need fancy features). The second approach requires less up-front capital, but is quite costly on a month-to-month basis. This approach is often called Centrex and provides each phone line with features like voice mail, caller id, call waiting, and simple call transfer – features to which today’s employees have become accustomed as they perform their daily tasks.

How expensive are these services? Without even getting into the sophistication of full Centrex services, consider this: a basic business line in my town costs $43.56 per month (before all of the charges, surcharges, service fees and taxes – which raise it to about $55). If I want to add Caller ID – that’s an additional $10.25. Voice mail: $14.95. Call Waiting: $5. Three-way conference calling: $5. If I just want this simple set of features, my monthly bill would be $78.76 before additional charges/fees/surcharges and taxes – and that’s just for one line. My local telephone company will also provide me with long distance service for 7 cents per minute. If each of my employees makes 2 hours of long distance calls per month, my monthly bill is now up to $87.16 (plus another $11 or more in fees/charges/surcharges/taxes) per employee!

Is there an ethical way to avoid these high costs?

There are at least two emerging approaches that are worth considering. Neither of these may yet meet your business needs, but if they do, the cost savings may be enormous.

The first is a technology with which you are probably already comfortable. In fact – you may already be paying for it as an incremental cost – but now may be the time to consider completely switching some of your employees over to… their cellphone. For comparison’s sake, consider the Small Business Pooling Plan from T-Mobile. This is national roaming plan that includes two phone “lines” fully loaded with features including: Two-Way Text Messaging, Enhanced VoiceMail, Built-In Paging, Caller ID, Conference Calling, Call Forwarding, Call Waiting and Call Hold – plus 800 minutes to be shared between the two lines (not counting calls to each other or other T-Mobile customers or weekend minutes). And of course the unique benefit of mobility. All for $69.99/month (roughly $35/employee). I’m sure this would be subject to fees/charges/surcharges/taxes similar to the business line from my local phone company, but still this represents more than a 50% savings!

As I said before, this solution won’t work for everyone. The call quality can vary dramatically depending on your local cell coverage, and features like call transfers are much less intuitive than in a Centrex solution. However, some employees may already prefer their feature-rich cellphones over the clunky old boxes tethered to the desk they rarely visit. For each such employee you can identify, there’s another ~$100 flowing to the bottom line.

The second solution is a bit more radical. New companies are offering a new breed of Centrex services called IP Centrex. The IP in the name stands for Internet Protocol, and these new services are delivered over the broadband Internet connection you may already have into your business. IP Centrex services are being rolled-out on a city-by-city basis, and the financial challenges within the telecom industry have certainly slowed that process, but where it’s available, the resulting service can be very impressive. The leader in the field is likely GoBeam which has a very impressive feature set and a user interface that redefines simplicity in using normal telephone capabilities. However, for a simple pricing comparison, turn instead to Vonage – another leading service provider. Vonage’s offer is amazingly simple – pay $39.99 per month and receive a telephone line, call waiting, voicemail, call forwarding, call transfer, and caller id – plus unlimited long distance calling within the U.S. and Canada. Even international calls are incredibly inexpensive – it’s cheaper to call London on Vonage than Lincoln on my local phone company’s plan.

As with cellphones, this solution isn’t for everyone. Call quality may vary depending on network traffic, and if your broadband Internet connection is at all unreliable, you may not yet be ready to switch entirely over to an IP Centrex solution. These solutions are also better suited to home offices and very small offices than offices with lots of employees who may overload that broadband connection that you thought was plenty of Internet bandwidth.

Even in a small company of 10 employees, changes like these can easily represent hundreds of dollars a month in cost savings – and what small business doesn’t appreciate those kinds of savings?

So – what are you going to do with all those free minutes you have on your new calling plan?

Consider a new offering from Mighty Works. In addition to their original shopping service, Mighty Works has recently announced their Cell Phone Devotionals service. With this service, you will receive a brief daily devotional on your cellphone (or any phone that you choose) from either The Bible League or Os Hillman. And, as with everything that Mighty Works offers, a portion of your spending flows back to your local church.

So – maybe it’s time to rethink your telephone strategy – it may prove profitable in more ways than one!



Russ McGuire is Online Director for Business Reform. Prior to joining Business
Reform, Mr. McGuire spent over twenty years in technology industries, performing various roles from writing mission critical software for the nuclear power and defense industries to developing core business strategies in the telecom industry. Mr. McGuire is currently focused on helping businesspeople apply God’s eternal truths to their real-world business challenges through
Business Reform’s online services. He can be reached at [email protected].

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