FreePBX vs. Hosted VoIP: Which Is Right for Your Small Business?
The Big Decision
When businesses ask me about VoIP, one of the first questions that comes up is: should we go with a hosted service or run our own system? It’s a fair question, and the answer really depends on your situation. Let me break it down the way I explain it to my clients.
Hosted VoIP: The Easy Button
Hosted VoIP is like renting an apartment. You pay a monthly fee per user (usually $20-40/month per line), and the provider handles everything — the servers, the updates, the maintenance. Services like RingCentral, Vonage Business, or Ooma are popular options.
The upside? It’s dead simple. You sign up, plug in your phones, and you’re off to the races. No servers to manage, no technical knowledge required. If something breaks, you call support.
The downside? You’re paying that monthly fee forever, and you’re at the mercy of their feature set and pricing changes. You also have less control over customization. If you want something specific — like a custom call flow or integration with your other tools — you might be out of luck.
FreePBX: The Power Move
FreePBX is like owning your house. There’s more upfront work, but you have total control. It’s an open-source phone system that runs on your own server (or a cloud VPS), and it’s incredibly powerful.
I run FreePBX systems for most of my MSP clients, and the flexibility is unmatched. Custom IVR menus, ring groups, time conditions, call recording, detailed CDR reports — you name it, you can do it. And once it’s set up, your ongoing costs are basically just your SIP trunking (the actual phone line service), which runs maybe $15-25/month for a small business.
The catch? You need someone technical to set it up and maintain it. FreePBX isn’t something you want to DIY unless you really know Linux and telephony. But if you’ve got an IT person (or hire one like me), the long-term savings and flexibility are hard to beat.
So Which One Should You Pick?
Here’s my general rule of thumb: if you have fewer than 5 employees, don’t have any special requirements, and just want phones that work — go hosted. It’s simple and affordable enough at that scale.
If you have 5+ employees, want advanced features, care about long-term costs, or need custom integrations — FreePBX is almost always the better play. The upfront investment pays for itself within the first year for most businesses.
Either way, the worst thing you can do is stay on traditional phone lines and overpay for less. Shoot me a message if you want help figuring out which path makes sense for you.
Got questions? Reach out at jeremy@lizzotte.com or use my contact form.
— Jeremy Lizzotte