So, we haven’t spent much, we have not committed to anything, all our numbers can be transitioned to new providers (check the small print for costs and caveats), as is our email domain and web addresses if we then decide to, but even if none of that is achievable then temporary redirection services can be put in place while new numbers and domains are transitioned into place (for phone calls, generally better to announce you are changing numbers with a message and have the user redial than it is to forward, but again that depends on the business type).
It depends on your business type as to how important your number is, suppliers vs customers.
Online retail, I am not sure why as a customer I would have your telephone number stored in my contacts. More likely I am dialling a number I see on your webpage when there is a problem. Updating suppliers can happen for any number of reasons.
Whatever happens, now we can move onto working out what is going to work for us, and we still have the 4G PAYG solution as our back up broadband service should our new service we go onto buy fail us miserably.
We can now relax a bit, without making any rash decisions and without throwing money away.
Why do we do this?
If I learned anything from my stint in Telecoms it is this
You can always pay more for something you need later.
You can never pay less for that you never needed.
In short, especially for a new business, start cheap and as cheap as possible, never commit to a long-term contract as that long term contract discount doesn’t benefit you after the first year.
The last thing we need to remember as a small business
Never EVER lease a solution.
One of the worst contracts I have ever seen put together was a VoIP solution on a lease.
The quarterly rental, for one quarter just for the equipment alone, cost more than just buying the equipment.
Then 2 x switches was put on for £400 each, the Handsets were sold at something like £300 each, along with mark-up for each these in the lease agreement, a mark-up on the licences included in the lease.
You cannot purchase VoIP licences outright, so these cannot appear on a lease, then the equipment itself, well, handsets were about £60 and the Switch was about £80
So for me personally, my day 1 is this
- Decent Router with 4G Sim Card – £200-300
- Device Bandwidth Management for the phones
- Polycom or Yealink Handsets (approx. £80 each) for 1-10 users
- Rental £7-10 per month 1 month rolling contract
- 2 x 12 port POE switch £180 (roughly)
So in my first 3 months, I am parting with at most (assuming 10 users)
Reusable equipment – £1300
Non-Reusable equipment – £0
That is an important notion there, that is the minimum cost for equipment I pay on any solution
Rental (assuming 10 users)
£70-£100 per month for 10 Users
£40 per month for 4G (even £80 is fine, as it is temporary)
Again, that is rental I am paying on any solution, I am using the services
So if I later drop the 4G for a fibre line, I am not paying for both if I don’t want to, remember, 1 month rolling contracts day 1.
Day 2 set up
Depends what my geographical location is to my long-term solution
Could be a single Fibre line, £50 per month rental.
Could be bonded ADSL solution
Broadband can be 12 months as we do have a back up solution if it ends up being horrendous.
Either way, I want the decent router I purchased and not the free one on offer with the broadband, so I can set a bandwidth allocation for the phones and control my own settings if needed.
(Be careful with what is out there for free, my EE Brightbox actually configures device bandwidth management in such a way that you end up requiring more bandwidth not less)
I would never have a separate broadband for my phones and devices, as it offers nothing more over device bandwidth management other than additional cost and wasting bandwidth capacity. The only exception to this is where the broadband services available are substantially low in speed, but then I would have Bonded ADSL services, so again, this would still be shared.
Now if any provider says to me “you must use our equipment” I know that 99 times out of 100 that is a lie, so I avoid them like the plague. There is certain equipment that maybe they should provide, but phones, switches and routers do not come under that.
In a bonded ADSL solution, I can still use my router, they provide additional routers and equipment, but my router is still managing the LAN.
Year 1 set up
I never knew my concurrent call requirement, which is how you price in telecoms and how you decide whether you get an on-site PBX or use a Hosted PBX (VoIP) solution
In essence, any communication provider telling you their service is correct without knowing this requirement telling porkies.
As a new business, while any provider can cater for your needs, without knowing this, you can never say how suitable a solution is.
What I may find in Year 1, Year 2, Year X is that
I have a lot of employees, but not many of them are on the phone all of the time or even most of the time.
So let’s say I grow to 20 users over time, then I find that I only have 4 people on the phone at the same time, what do I do?
I could see this pattern occurring earlier, so I could have changed at any time, but what I want to do if this pattern does occur is
Invest in a PBX
If I have the Captial, which after several years of operating I may now have, what I will likely find is that for £6k AT MOST (considering 20 Extensions, but that is still over priced in my book) my monthly rental goes down by 80%, whatever that rental may be.
I could have started on £7 per handset rental, then found myself on £15 per handset to get advanced features.
When you compare solutions, moving from VoIP to PBX or PBX to VoIP, you always do a 5 or 10 year cost projection for what you would spend on each solution.
So what are we achieving here with the approach taken, what is the point of not investing early on in communication services?
The point is, in my experience of reviewing people’s telecoms set ups, and setting them up myself, unless you have an established business with capital and a decent history of call records along with a growth plan, you can never know what you actually need.
From looking at these over the last 10-12 Years (I have moonlighted in every non-telecoms job role I have had), I would say for a small business, this is what you need to consider.
It is not the cost of my solution, but the cost of my mistake.
My mistake is Inevitable.
Even for me, setting up my own business, and helping other businesses, I have 10 years of solid Telecoms experience over any normal small business and their employees, from reading Ofcom reports (which are mental to say the least) to purchasing, deploying and configuring solutions.
If a small business approached me with a detailed plan of what they intended to do, I would still tell them
If you are a small business, it doesn’t matter whether you pay me to make the mistake for you, or you make the mistake yourself, just make sure it is the cheapest short term mistake you can make whilst providing a working solution
This would be different if a well established business, or a medium to large business approached me, I can use the data they have to work out something viable to add significant benefit to their business for a reduction in overheads and equipment.
I know this because I know how to work out telecoms costs, they are over 5 years or 10 years dependent on the business, which we will cover in a coming article,
But if we take the example from this article, the cost of my day 1 set up over 5 years for 10 users is
Equipment (including Switches, Routers etc.) = £1320
Rental = £8400 (£140 per month for 5 years)
So even if I start with 4 and grow to 10, this is the most I would have paid.
Compared to this package I have seen sold that I mentioned earlier, which offered the customer little to no benefit and was on a 5 year contract
“I have seen VoIP solutions offering little to no benefit for a small business going for £50-60 per month per user PLUS £300-400 per handset, and this was outside the Managed Office arena (where these are normal prices). Plus the need for a dedicated Fibre broadband line of £100 per month.”
Equipment = £3500 (+ Switches, router etc.)
Rental = £36,000 over 5 years
To be fair, on the 5 year contract I might get a 10% discount on rental, maybe free equipment, so let us assume that is what I got.
Equipment = £0 (+ Switches, router etc.)
Rental = £32,400
Now the kicker
My solution is 1 month rolling contract for everything other than the broadband which is 12 months.
So, if it doesn’t work or I outgrow it, the cost to replace everything is just the cost of new stuff. I still used the old stuff, which I would have paid out for by now in either scenario and I can still definitely re-use the most expensive stuff going forward (router, switches) if not the cheaper stuff as well (Handsets)
However, if the 5 year contract is not suitable, the cost to replace everything is likely (in the small print)
- The remainder of the 5 Year contract at full price
- A projected call cost for the remainder of the contract based on the previous 3 months
- The discounts applied to any part of the contract paid to date (so if at month 24 I cancel out, I pay the 10% discount amount over the previous 24 months)
- If the equipment was leased, returned or purchased at this time.
- If it is VoIP, this does not equal a working system
- Then the new stuff I now need as well
No reputable supplier would provide a long-term contract to a small business.
No reputable supplier would start a new business on any package higher than the basic of basic packages they offer.
Because as a reputable supplier would know, you can always increase your costs over time, but you can never stop paying for something you don’t need and never needed while it is in contract.
A lot of people opt for a “This is too confusing, I’m just going with it” approach with communications and services, if that is your position, then I would recommend as would any reputable supplier that you take an approach to avoid the complexity which is,
Just go for 1 month rolling contracts, 12 months at most, as in your case, the length of the contract just increases the likelihood you are stuck with something you didn’t understand.
You can either not understand something and pay out a reasonable amount
Or you can not understand something and pay out a lot of money whilst being stuck with it
If I can sum this article up with 2 simple points
- No Long term contracts
- Make a cheap short term mistake instead of an expensive long term regret
Anyway, I hope you found this article helpful, you can see some of our other small business articles on the link below.