February 6, 2003
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| Calling small business |
| Getting the best phone systems and calling services for your company |
| By Jeffrey Fink |
What's the most important tool for a small or medium-sized business? While some people might say a personal computer, the vast majority of business owners choose the telephone as their most indispensable item for conducting business. And while a stand-alone PC helps your business work smarter, the computer really shifts into high gear when it's connected to the phone network and on to the Internet and World Wide Web.
Getting your business phone systems installed and running doesn't have to be a Herculean task, but too often companies, especially small businesses, fail to plan sufficiently for growth or simply add phone system responsibility to an over-burdened office manager. With a few simple guidelines, you can use the expertise of your vendors and get the right systems and services the first time with an eye toward future growth.
Timetables and Advance Planning
When does your phone system need to be up and running? While phones are one of the most important assets for closing deals, all too often decisions on this crucial infrastructure are left to the last minute. It takes an absolute minimum of four weeks to order equipment, have the premises wired, get any necessary equipment installed and tested and make sure dial tone service and calling features work correctly. Plan on getting the ball rolling at least eight weeks before the target start date to avoid disappointments and costly delays.
Layout and Floor Plan
Is the new office ready for lines to be installed? The architect, designer or contractor for the space should prepare a carefully drawn map of the office configuration, noting where expected phone lines, fax machines, networked computer terminals and other equipment will be located. Watch for furniture, low windows, doorways and other obstacles. Smart planning reduces the need to run unsightly cables around desks or behind plants.
Ask the local phone company or wiring installation contractor who is responsible for the last several feet of wiring into your office. The location of the "demarc," or demarcation point between the private wires of the office and the wires of the public phone network is important for determining maintenance responsibilities and other issues. In many cases, carriers provide service to a central hub in an office building, and tenants are responsible for connecting their equipment to this hub.
When moving into a new space, ensure sufficient space for a telecom equipment room. The current phone and computer system may not require a lot of hardware, but future expansions could require additional space. Smaller businesses should set aside about 70-80 square feet, while larger concerns should plan for 150-200 square feet for room to grow.
Phones Do More Than Just Ring
People in the telecom business used to refer to POTS-plain old telephone service-but with new high-tech features, your phone can do a lot more than simply connect you to another calling party. Caller identification systems can show the name and number of whoever is calling, while a voice mail system can automatically handle multiple callers and eliminate the need for a receptionist. Dialing directories set up one-touch speed dialing for frequently called numbers, and hands-free operations with headsets and even wireless connections are critical for individual workers spending long periods of time on the phone.
A number of equipment manufacturers, large and small, offer these and other telecommunications systems. One isn't necessarily better than the other, but a savvy shopping will ask his or her supplier for customer references from similar businesses, both in size and industry. Business owners should secure at least three bids and shouldn't hesitate to negotiate between hardware vendors.
What's Your Equipment Budget?
Even for a small operation just starting out, it's extremely important to plan for potential future growth. Generally, office phone systems can be divided into three categories: small businesses with less than 10 people, medium-sized firms with less than 50 employees and larger companies with more than 50 workers. While it's tempting to get a small system that can handle a three or four-person shop, that small investment could be wasted if the company outgrows the system in a few years. Even though each individual business phone can range between $150 for a handset with minimal features to $1,500 or more for a technology-packed system, in the long run it's less expensive to plan for growth now rather than later.
You can minimize upfront costs by purchasing a good refurbished system, though warranty and service plan options are obviously reduced. Leasing instead of buying is also a way to trim costs, reducing a large upfront payment. Three, four or five-year lease plans are usually best for businesses that are just getting started.
Internet Access
It's hard to imagine any business starting in the 21st century without e-mail access and at least a minimal website, "hosted" by a web service provider. But you don't have to be a web guru and have a site with all the bells and whistles. A "business card" web site displays basic business information and can be modified as the business expands. It also holds a Web address, also known as a URL or universal record locator, preventing someone else from getting the name you want to use. For example, if www.yourbusiness.com is already taken, try registering subtle variations of the chosen name like www.yourbusiness.net or www.yourbusinesses.com. Your web service provider should be able to help you with this and handle the registration. Website name registration costs about $100 a year, while costs of hosting services vary with the size of the site.
In the past, small businesses usually had to make do with dial-up Web connections and correspondingly slow transmission speeds. Today's DSL, digital subscriber lines, are faster connections to the Web and correspondingly more expensive at about $40-50 a month. Another option is integrated access, a high-capacity full or fractional T-1 line that combines your voice calling with an "always on" fast Internet connection. Look for a single vendor that offers all these services instead of working with multiple outlets and getting separate bills from your phone company, web hosting service and access provider.
Features
In addition to the hardware and wiring access, you'll have to decide how the phone systems' features will be delivered, also often referred to as the calling platform. Voice mail, teleconferencing and other handy features can be accessed through Centrex, an abbreviation for central office exchange services, which is a lease from the local phone company that uses their equipment located in the your neighborhood telecom central office. Another option is a private branch exchange, commonly referred to as PBX. This locates the equipment on your site.
Generally speaking, Centrex is best for smaller companies of less than 50 employees because it minimizes the amount of equipment in the office and eases the billing process - charges are billed on per line basis, of between $35 and $100 per line per month. As your business grows, the PBX eventually overcomes its a larger up-front expense to pay for itself in savings over Centrex charges. A small PBX system with voice mail for five employees starts at around $3,000 but will pay for itself in Centrex savings over time.
Calling Plans and Packages
With the passage of the landmark Telecommunications Act of 1996, the U.S. Congress intended to open up local phone service to competition, much the way the break-up of AT&T and the Bell System in the early 1980s cracked open the long distance monopoly. So while Ameritech was once the only option for local phone service in the Chicago area, there are now a number of choices available. Some companies, such as AT&T and MCI, use an unbundled network element platform (UNE-P), buying local service wholesale and reselling it. Other companies are facilities-based, with their own dedicated Chicago area telecommunications switch and equipment in central offices around the area.
Whatever the company, existing businesses should get a telecom representative to review past bills, known as customer service records or CSRs, to determine calling patterns. New businesses should review where they will be calling - local, local toll, long distance or international calls - and how many calls will be made. In the Chicago area, there can be a higher rate charged for "local toll" calls, those calls greater than eight miles from the calling location.
Beware of low introductory calling rates that will soon expire with significantly higher rates kicking in for the duration of the contract. Some telecom companies give discounts for calls made to other parties on the provider's own network, while others offer volume and term discount plans. Look for a plan with flexibility and don't lock in to a long-term plan. Ask for references and check with the Illinois Commerce Commission to see if there are excessive complaints about the chosen carrier.
As a ballpark figure, your business will spend between three and five percent of its annual revenue on telecommunications, with intensive customer service or telemarketing firms spending more. Use the help and expertise provided by your equipment and service vendors, but ultimately the research and decision making of choosing a telecom provider is up to you.
Jeff Fink serves Chicago city vice president and general manager for Allegiance Telecom. He can be reached at pr@algx.com or 630/522-5200 or 312/228-6300.
More information is available at the Allegiance Telecom Web site at www.algx.com.
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