The digital upgrade

Virtual phone systems: Why they're great for small businesses

Posted by Casey Solomon

Good telephone services remain essential for small businesses. Many customers prefer to use this method to keep in touch, as it provides a personal connection that other channels can't match.

But with legacy landline phone systems set to be retired in the coming years, firms that are still using traditional copper cables will find themselves needing to upgrade sooner rather than later. Aside from this, many small firms may find that traditional phone systems are no longer able to keep up with the demand of modern businesses, as they do not offer the features or flexibility of newer solutions.

For many companies, the answer to this will be a virtual phone system. Adopting this technology gives small businesses, startups and freelancers alike access to services that have been previously reserved for larger companies, as well as ensuring their phone systems are futureproofed for whatever the coming years may hold.

What is a virtual phone system?

So what is a virtual phone system and how does it work? Essentially, these solutions are a communications platform that uses the internet to make and receive calls rather than a traditional copper landline. Instead of routing calls through old-fashioned exchanges, they use cloud computing to connect callers, providing a high-quality, reliable and cost-effective solution for companies of all sizes. 

How does a virtual phone system work?

You may also hear virtual phone systems referred to as VoIP - or Voice over Internet Protocol. They're often used interchangeably, but strictly speaking, the term 'virtual phone system' refers to the basic functionality that lets you make calls over the internet, whereas VoIP often includes advanced features and is more of a unified communications platform.

A virtual VoIP service works by turning phone signals into digital packets, which are then sent via internet cables to the cloud exchange. This means incoming calls can be routed to whatever device the business chooses, including a traditional landline, a mobile phone or even a desktop or laptop PC.

What is the difference between a virtual phone system and a PBX?

For many businesses, the main alternative to a virtual phone system is a public branch exchange, or PBX, solution. On-site PBXs have been around for decades, and are generally used by larger firms that need dedicated phone lines. They offer a way of routing and connecting calls within a business and link directly into public telephone networks. These solutions can be complex products, requiring a dedicated server and infrastructure that all the phones plug into.

However, these can be beyond the budget or technical capabilities of small firms. Virtual hosted PBX systems that take this equipment out of the business and into the cloud, on the other hand, are a much more cost-effective option that also offer better scalability and mobility for small business users. 

How do you use a virtual phone?

For employees or customers, using a virtual cloud phone system that connects with existing handsets should be no different than using a traditional landline. The numbers for your business will still look the same, including an area code, while the process of making or receiving calls won't change either.

One area where using a virtual phone system differs is how they are set up behind the scenes. For example, you'll be able to assign your own phone numbers to the business regardless of geography. This means you can keep your legacy area codes if you want to maintain a local connection to customers, but you can also choose from any other national code - such as an 020 London number - no matter where your office is actually located.

Another difference when using a virtual phone system is you have a far wider range of options for making and receiving calls. This means if you want to forward incoming calls to a mobile phone, for instance, you can do so easily. You can also set up a virtual phone service to be accessed via a web browser, allowing you to make and receive calls from any internet-connected device.

Working remotely? Use any device anywhere!


  • Make business calls from your computer
  • Available for Windows and macOS
  • Sync contacts from your mobile
  • One-click call audio & video meetings


  • Superior call quality & HD voice
  • Available on iOS & Android devices
  • Powerful call controls in your hand
  • Join meetings from anywhere
  • Never miss a call

How to know if you need a virtual phone system

If you're still on legacy phone technologies, moving to a virtual phone system before the 2025 landline switch off is likely to be one of the best options for small business users looking to future proof their communications easier and cost-effectively. However, there are a range of other scenarios where this solution may be especially useful.

When do you need a virtual business phone number?

There are a few key signs you might be able to benefit from a virtual phone system for your small business. Ask yourself if any of the below issues sound familiar to you - if so, moving to a VoIP-powered communications option could be hugely beneficial.

  • You're paying too much for your phone - Legacy technologies are often much more expensive to run than virtual phone systems. With finances tight for many small businesses, being able to secure a cheap phone system using VoIP technology gives firms one less thing to worry about.
  • You need to increase your number of lines - Maybe you're looking to increase your number of employees, or open a new location. One of the major benefits of VoIP systems is it's easy to add a virtual phone number when required, with no need to set up new cables or other infrastructure.
  • You can't answer calls quickly enough - If your customer base has outgrown your existing system, they could end up spending a lot of time on hold, or hang up completely if they can't get through. 

Which type of businesses can benefit from virtual phone systems?

While all businesses should be able to enjoy the benefits of virtual phone numbers, there are some types of company that could especially make use of this technology, whether this is due to the sector they operate in or the way their firm is set up.

If you have a large number of home workers or remote workers who spend a lot of their time in the field, for example, virtual phone numbers can be very useful. These ensure people can still be contactable on the same number, no matter where they are.

VoIP phone systems are also ideal for freelancers and startups. This technology ensures they aren't paying for capacity or features they don't use, but it will allow them to scale up quickly should the need arise.

Other companies that may be well-placed to enjoy the benefits of virtual phones include those with supply chains or customers overseas, as cheap international calling rates are another advantage. 

How do you set up a virtual phone system?

Deciding when to migrate to a more modern communication system isn't an easy decision and many firms may be worried about any potential disruption this may cause. However, moving to a virtual phone system is usually a very simple process.

With the right partner, all you have to do is choose the phone numbers you want and the tariff that's best for you. You can get started with a virtual business phone system in as little as two minutes, and there'll be no need to have an engineer visit to install any new lines, or for you to maintain any new hardware.

Instead, it's all done for you. Once the VoIP system is up and running, all the management can be controlled from an online dashboard. This is where you can set up options such as call forwarding, voicemail greetings and define your opening hours, among many other features. This is also where you can get instant insight on the performance of your system via a variety of reporting metrics.

What are the benefits of a virtual phone system?

Among the main advantages of virtual hosted VoIP technology over a traditional phone system are ease of use and lower costs. If you just want a simple business communication service to keep you in touch with customers, colleagues and suppliers, a virtual phone system is a cheap, reliable solution.

But they can offer so much more than this. With the right package, you can take advantage of a wide variety of features that can transform a basic phone line into a powerful unified communications system.

What are some important features of a virtual phone system?

Virtual phone systems can offer a wide range of additional features that make them more useful than a landline. These generally fall into a few key categories. For starters, there are call handling features that allow you to create call flows, redirect an incoming call to the right person or set up voicemail greetings and out-of-hours messages, among others.

There are also a range of reporting tools, which can be very useful to growing businesses and those with a focus on customer service. This can show business owners exactly how many calls they're taking, how long they last, time to pick up and more. This can help identify peak times and when there's a need to make more resources available.

In addition, many virtual phone systems can connect with other tools to provide a more unified communications experience. This may include offering video conference services or integrations with business software like CRM systems, ensuring that you'll always have the right information on hand to answer any queries.

Can you call from a virtual number?

Yes. Virtual phone systems don't just direct any incoming call to the right person. Making a phone call is just as simple as receiving one. If you're using a handset, they work in exactly the same way as a landline connection, while you can also dial outbound numbers directly from a mobile app or softphone browser extension.

When you dial outbound calls from a virtual phone number, there's no indication to the recipient you're on a virtual phone system, and their caller ID will display the virtual phone number you've selected. This means, for example, that if you've chosen a local number for your business, this will be displayed to a customer, even if you happen to be elsewhere when making the call.

Can a virtual phone system be used at home?

Yes. Because a VoIP phone system doesn't depend on traditional cables, it can be used anywhere there is an internet connection, making it ideal for remote work. 

Whether you have employees who want to base themselves permanently from home, or are embracing a hybrid working environment that sees users split their time between home and the office, they can still be assigned a single number that's contactable in any location.

One useful way to do this is through a mobile app. You may be familiar with consumer-based messaging services such as WhatsApp that also offer voice calls. Small business IP phones work on the same principle, so you can pick up on your mobile device when you don't have access to your office-based handset.


Choose your number to get started

How can I set up a virtual phone system?

We noted above that the setup process for a virtual phone line is fast and straightforward. However, you will have to make a few decisions at the start of this process to help your chosen VoIP telephone system provider get you up and running. Fortunately, this is very straightforward, with the process taking as little as two minutes.

Can a traditional phone number become your virtual phone number?

One key decision is what numbers you want to use. The good news is you can move your existing landline numbers directly over to your virtual phone service. This means, for instance, that if you have local numbers that your customer base is already familiar with, you can keep them.

However, some firms may want to add multiple numbers or area codes from outside their local area. London 020 codes, for example, are very popular with businesses looking to project a professional and metropolitan impression on potential customers. The choice is yours.

How much does a virtual phone system cost?

Virtual phone systems offer significant cost savings over landline alternatives. They're typically priced per user and most packages offer unlimited inbound and outbound calls to UK landlines and mobile numbers. This means you don't have to worry about monitoring your phone usage to avoid any unexpected surprises when you get your bill at the end of the month.

At bOnline, for instance, unlimited calling packages start at just £13.95 a month per user (plus VAT), including unlimited calling and dozens of additional features. 

By comparison, an average legacy business landline may start at upwards of £30 a month just for line rental, before costs-per-minute are taken into account. But with a fixed-cost virtual phone system, the more you use your phones, the more you save.

Which devices can you use with a virtual phone system?

You should be able to use almost any device with a virtual phone system, including traditional handsets, mobile devices or even desktop and laptop PCs. All you need is an internet connection and, in the case of PC users, a headset with a mic, and you're good to go.

While most modern handouts will be equipped to work with both landline and IP phone services, some older equipment may lack this functionality. Therefore if you are planning on using existing hardware to make and receive calls via virtual phone systems, it's important you check that all legacy handsets are already equipped with capabilities for both landline and VoIP, and make plans to upgrade your hardware if not.

The final thing you'll need for a reliable virtual phone service is a fast broadband connection. While individual calls only take up a small amount of bandwidth - with recommended speed being just a couple of Megabits per second - these demands may quickly add up as your business grows and the number of lines in use simultaneously increases. Therefore, you may need to ensure you can secure a cheap business broadband deal in order to make the most of an IP phone system.