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A Wealth of Telecom Choices - A virtual smorgasbord of telecommunications selections these days means entrepreneurs have to choose what is best for business.

The choices for business telephone services have exploded in the past few years. What’s more, some of these choices represent completely new product categories that did not even exist until recently.

If you are baffled by all the choices, trust me, you’re not alone.

I am going to attempt to cut through the confusion and give you a quick reference guide explaining the differences in some of the most common telephony choices and when and how to use them in your business. Let’s take a look:

Landline telephones—Traditional landline telephones once were the only choice we had. Today, landline phone service is just the starting point.

  • My take: Traditional landline service is still the basic telephony service of choice for most businesses, due to its reliability, sound quality and relative ease of getting started. Competition from new telephony alternatives like Voice over Internet Protocol (VoIP) is driving down the cost of business landlines in many parts of the country. Shop around. Look especially at providers such as AT&T that also offer wireless services. They can bundle wireless and landline services into one cost-effective package, along with convenience features such as unified messaging (the ability to check voicemails from landline and wireless phones in one place).

Skype—Skype, which is owned by eBay, is a service that lets you make calls for free over the Internet to someone who also has downloaded the Skype software. But it’s even more versatile: For 2.1 cents per minute (currently free within the U.S. and Canada), you can call individuals who do not have Skype but who use landlines or wireless phones (called SkypeOut). And you can receive calls from individuals who call you from their landline or wireless phones (called SkypeIn).

  • My take: Skype is a dirt-cheap long distance substitute, especially well-suited for staying in touch with friends and family internationally. Business use of Skype is also increasing, especially among Web-savvy solo entrepreneurs and microbusinesses on tight budgets. However, Skype is not a complete replacement for traditional telephone service because it does not support emergency 911 calling. Best use for Skype: Use it selectively to hold down long distance costs.

VoIP—VoIP lets you make calls over a broadband Internet connection instead of over traditional telephone lines. Options range from low-cost packaged solutions such as Vonage, which currently offers a small business package with unlimited local and long distance calling for under $50 per month, all the way up to sophisticated IP phone systems that require pricey hardware. Even traditional phone companies, pressured by the competition, are offering VOIP packages.

  • My take: VOIP gives you a large degree of control over your phone system, letting you reconfigure it quickly and easily to accommodate new hires or changes. VOIP also can coordinate employees in multiple locations under a single phone system. Low-end packages run off the same broadband connection you use for Internet access, and can lead to sound quality issues. Mid-range and higher solutions use private IP connections.

Wireless phones—Will the need to count wireless minutes become a thing of the past? Today’s wireless offerings, with unlimited night and weekend plans, calling circles, and rollover policies are inching us closer to that day.

  • My take: An increasing number of solo entrepreneurs are going 100 percent wireless. They are eliminating landlines altogether in favor of wireless as their primary phone. Most likely, though, this is not a practical alternative unless you are a consultant or other sole proprietor. For businesses larger than one person, wireless phones are a supplement to the main telephone system, albeit an important, even indispensable one.

PDAs—Personal digital assistants, palmtops and the latest term-du-jour, smartphones, let you make phone calls like standard wireless phones. Compared with standard wireless phones, these devices add many more functions and features, including larger screens and sometimes typewriter-like keypads. Blackberry and Treo are well-known brands.

  • My take: These devices are the tool of choice if you regularly need access to e-mails, documents, or calendars while out of the office. Remember, while it may be possible to send and receive e-mails on a standard wireless phone, it’s agonizingly cumbersome—and who wants to peer at e-mail on a tiny one-inch screen? A PDA or smartphone is a far better choice. Plus, on business trips, a PDA that slips into your pocket or purse can even replace a laptop-that-feels-like-100-pounds-by-the-time-you-get-to-the-airport-gate. Just don’t become addicted to checking messages on your Crackberry, er, Blackberry, and commit a business faux pas, like checking your e-mail in an important meeting with a customer.

Virtual switchboard and voicemail services—In the past few years a whole new category of telephony service has entered the picture. These new software-based services provide a menu of options to beef up your existing phone system: central automated attendant, advanced voicemail features, conference calling, toll-free numbers, fax-to-e-mail, voice-to-e-mail, customized on-hold messages, and more. These new services are layered on top off—not in place of—basic phone connectivity. They work with landlines, wireless, and/or VOIP phones and require no extra hardware. GotVMail, RingCentral, and Freedom800 are three brands in this space.

  • My take: For a low monthly fee (as little as $10) these services can make your small business sound bigger and more professional. The services are excellent for businesses with employees and offices in multiple locales, giving the ability to seamlessly transfer calls and forward messages among them. And it’s all invisible to the caller, who does not know what location employees may be speaking from.

With all the choices available today, you can have a more robust telephone presence at a lower cost than most of us would have dreamed possible a decade ago. These alternatives can keep the cost of doing business down and make telecommunications services available to employees throughout your company, no matter where they are, but it is a decision that you, as a small business owner, must make on a case-by-case basis. I think the overall benefits outweigh the risks. Don’t be afraid to go for it.

Anita Campbell is a writer, speaker and radio talk show host who closely follows trends in the small business market at her site, Small Business Trends.