Everyday, more and more business owners are discovering the cost saving benefits of switching to a VoIP business phone solution. VoIP calling is a great alternative to calling with traditional phone service providers, because it transmits phone calls over the Internet, essentially bypassing pricey traditional wireline service.

Depending on the business and the VoIP solution, businesses stand to save in the thousands or hundreds of thousands of dollars every year on phone service. Businesses have two options in VoIP solutions: hosted VoIP and on-premise VoIP. Hosted VoIP refers to a PBX service that is maintained and operated by the Internet Telephony Service Provider. On-premise solutions are PBXs that companies own and maintain on their own premises, and on their own time.

Once you’ve officially decided to set up a VoIP system for your business, you will need to determine what type of PBX system is appropriate for your business.

Hosted PBXs are popular solutions because they are minimally invasive and simplify the process of phone installation. Hosted PBXs generally cost around $20/line each month. Some plans with different providers offer more variety and personalization than others in your hosted PBX plan.

For other businesses, a hands-on approach is preferable. Some smaller businesses may find it easier to design and implement their own PBX solution, and some bigger businesses may just be more comfortable with operating their own system.

There are both hardware and software IP PBX solutions for on-premise VoIP setups. If you already have a legacy analog PBX system, it may be easier to stick with a hardware setup. Hardware PBXs may run anywhere from a few hundred to a few thousand dollars.

While hardware PBXs are still commonly used, their expensive price tags sometimes deter consumers. Many business owners are turning to free software systems such as Asterisk to handle their inbound and outbound calls.

Asterisk is a popular PBX option because not only is it a free service, but it is an open source software that you download on your computer, which basically transforms your computer into a communications server. The open source framework uses Internet-based cloud technology, giving you the option of altering or enhancing the system to best suit your business. You can easily set it up without special hardware or a visit from a technician, and you only need an IT specialist to help handle the downloading process.

As long as you are pretty tech-savvy, the process of setting up Asterisk should be pretty manageable. There are just a few hoops to jump through:

1. Check your office Internet connection. Your VoIP can only be as good as your Internet speed.
2. Log onto your designated computer. If your computer does not already use Linux, you may want to look into installing it for your computer. Asterisk can run on various operating systems, but Linux is the only officially supported operating system.
3. Visit http://www.asterisk.org/downloads to download the latest version.
4. Build and install the Asterisk software. If you don’t feel confident as a programmer, you may want to consult an IT specialist to help you take advantage of the open source system so you get a PBX that really does suit your business best.
5. Install Zaptel modules.
6. Configure SIP channels in order to receive inbound and outbound calls. Phone systems have two “sides”, the internal or PBX side, and the external or SIP side. By setting up your own PBX, you are solving your internal phoning needs. This means you can now call between office extensions without issue through IP. However, you will still need to find a SIP service so that you can send calls out of the office and receive calls from external phones. SIP plans with service providers start around $50/month for a fairly small SIP solution. SIP trunks allow you to receive both VoIP and wireline calls, and send calls to both VoIP and wireline numbers.
7. Set up dial plans. Dial plans allocate the telephone numbers and route calls within the network.
8. Make a test call.

For the technologically confident, open source software PBXs are an easy answer. They are cheap, reliable, and easy to maintain. And for those who are interested in telecom, Asterisk PBXs are a great introduction to the inner workings of telecom technology.

Rachel Greenberg is site editor for My VoIP Provider. Follow her on Google+ for more articles on VoIP.