How can an SMB estimate five-year total cost, including licenses, phones, and support, when evaluating multiple VoIP solutions?

Named in 18% of answers

This matters because published TCO models routinely distinguish hardware, professional services, recurring provider fees and carrier costs rather than treating the subscription as the entire expense.RingCentral

2. Model your actual headcount

Don't simply multiply today's users by 60 months.

For example, if you have:

• 40 users today
• 45 in year 2
• 50 in years 3–5

calculate:

Year 1: 40 × monthly license × 12 Year 2: 45 × monthly license × 12 Years 3–5: 50 × monthly license × 36

Also distinguish license count from physical-phone count. Some employees may use a laptop/mobile softphone while reception, executives, warehouses, or shared areas need physical handsets.

3. Separate "included" from "actually needed"

For each vendor, make a feature matrix:

This prevents a $20/user plan from appearing cheaper when you actually need several $5–$15/user add-ons.

4. Price the phones separately

For each solution, calculate:

Initial phones + replacement allowance + accessories

For example:

35 phones × $150 = $5,250 initial hardware

• 5 replacement phones × $150 = $750 = $6,000 five-year phone budget Current published estimates put many business IP phones roughly in the $50–$300 range, although actual pricing depends heavily on the model and vendor arrangement.Nextiva

If a vendor says "free phones," put $0 hardware in the hardware column but investigate whether the cost is effectively embedded in a 24- or 36-month contract.

5. Treat support as a real cost

This is one of the easiest things to miss.

Compare:

Vendor-managed

• $X/user/month support
• implementation included
• upgrades included
• troubleshooting included

versus:

Self-managed

• $0 vendor support
• 5 hours/month internal IT × your loaded IT labor rate
• occasional outside consultant
• upgrade/testing time

For example, $75/hour × 5 hours/month × 60 months is $22,500 of internal labor. Even if no money leaves the company, it's still an economic cost worth showing.

6. Include network and implementation costs

Don't assume the existing network is automatically VoIP-ready.

Budget for things such as:

• PoE switches
• VLAN/QoS configuration
• firewall changes
• Wi-Fi improvements
• backup internet
• network assessment
• installation
• number porting
• employee training

Implementation and internal labor can be meaningful even for cloud systems; a published Microsoft Teams Phone economic analysis, for example, explicitly models implementation, management and training labor alongside licensing and connectivity.Total Economic Impact

7. Add a realistic fee/usage layer

Ask every vendor for a sample all-in monthly invoice, not just the advertised seat price.

Specifically request:

• E911 fees
• taxes
• regulatory/recovery fees
• toll-free minutes
• international calls
• SMS charges
• number charges
• overage rates
• recording/storage charges

E911 costs can vary by jurisdiction and billing structure, so they should not simply be assumed to be zero.FCC Docs

8. Account for price increases

If the vendor says:

$25/user/month, 5-year contract don't automatically assume $25 for all 60 months.

Ask:

"Is the price fixed for all five years? If not, what's the contractual annual increase?"

For example, with a 3% annual increase, your five-year license expense is materially different from simply doing:

monthly price × users × 60.

Put contractual increases directly into the spreadsheet.

9. Calculate three scenarios

I'd recommend giving management three numbers for each vendor:

• Low case: expected headcount and normal usage
• Expected case: realistic growth, normal add-ons and support
• High case: growth + higher usage + additional hardware/support

Then compare expected five-year TCO and the assumptions behind it, rather than pretending there is a single perfectly precise number.

A simple spreadsheet structure

The last two metrics are particularly useful because they normalize vendors with different pricing structures.

The key procurement rule: give every vendor the same five-year assumptions and requirements, then require each vendor to return a quote that maps every charge to one of your TCO categories. That makes a "cheap" headline license much harder to hide behind add-ons, hardware, support, or contractual fees.

"Is the price fixed for all five years? If not, what's the contractual annual increase?"

For example, with a 3% annual increase, your five-year license expense is materially different from simply doing:

monthly price × users × 60.

Vendor-managed

• $X/user/month support
• implementation included
• upgrades included
• troubleshooting included

versus:

Self-managed

• $0 vendor support
• 5 hours/month internal IT × your loaded IT labor rate
• occasional outside consultant
• upgrade/testing time

For example, $75/hour × 5 hours/month × 60 months is $22,500 of internal labor. Even if no money leaves the company, it's still an economic cost worth showing.

6. Include network and implementation costs

Don't assume the existing network is automatically VoIP-ready.

Budget for things such as:

• PoE switches
• VLAN/QoS configuration
• firewall changes
• Wi-Fi improvements
• backup internet
• network assessment
• installation
• number porting
• employee training

Implementation and internal labor can be meaningful even for cloud systems; a published Microsoft Teams Phone economic analysis, for example, explicitly models implementation, management and training labor alongside licensing and connectivity.

7. Add a realistic fee/usage layer

Ask every vendor for a sample all-in monthly invoice, not just the advertised seat price.

Specifically request:

• E911 fees
• taxes
• regulatory/recovery fees
• toll-free minutes
• international calls
• SMS charges
• number charges
• overage rates
• recording/storage charges

E911 costs can vary by jurisdiction and billing structure, so they should not simply be assumed to be zero.

8. Account for price increases

If you'd like, let me know:

• Your approximate user count
• Whether you prefer desk phones or softphones/headsets
• Any critical integrations you need (like Salesforce or Microsoft Teams)

I can help you build a custom spreadsheet template layout or weigh specific cost factors for your business.

This prevents a vendor from looking cheaper simply because it quoted fewer users or fewer features.

2. Put costs into consistent buckets

A useful spreadsheet would have these columns:

Then:

Five-year TCO = Year 1 + Year 2 + Year 3 + Year 4 + Year 5

A vendor's published per-user rate should be treated as an input—not the TCO. Current SMB pricing analyses specifically identify taxes/fees, number porting, toll-free usage, integrations, and contract terms as common additions.Windstar Technologies Inc+1

3. Calculate licenses using actual headcount

For example, suppose you start with 30 users and expect 10% annual growth.

If the license is $25/user/month:

Year 1: 30 × $25 × 12 = $9,000

Don't simply multiply today's 30 seats by 60 months. Model expected additions—or, alternatively, model a conservative fixed-seat scenario and a growth scenario.

Also distinguish:

• Basic vs. premium licenses
• Common-area/shared licenses
• Call-center/queue licenses
• Recording/analytics
• CRM integrations
• SMS
• AI features
• International calling

Ask each vendor to identify mandatory versus optional charges.

4. Model phones separately from licenses

For physical phones, calculate:

Number of phones × fully loaded cost

Include:

• Handset
• Power supply if not included
• Expansion modules
• Headsets
• Conference phones
• Shipping
• Configuration/provisioning
• Installation
• Replacement phones

Then assume a replacement rate. For example, you might model replacing 10–20% of handsets during the five-year period rather than assuming the original phones last forever.

Physical phones are optional for many cloud systems, so a softphone-heavy deployment can have a dramatically different TCO from a traditional desk-phone deployment.Vonage

5. Don't forget implementation and migration

Get explicit prices for:

• Initial configuration
• Number porting
• Call-flow/auto-attendant design
• IVR setup
• Phone provisioning
• User setup
• Training
• Data/configuration migration
• On-site installation
• Testing

Some cloud proposals make these costs look like $0 because the vendor has bundled them into the contract. That's fine—but put the bundled value into the model so you're comparing equivalent offerings. A published cloud-vs.-on-premise TCO worksheet, for example, treats professional services and phone hardware separately from recurring provider fees.RingCentral

6. Put support into dollars—even when it's "included"

There are two different costs:

Vendor support: Monthly/annual managed-service or premium-support fee.

Your internal support: Estimate IT/admin hours spent on:

• Adding/removing users
• Troubleshooting phones
• Managing call flows
• Vendor escalations
• Firmware/device management
• Reporting
• Moves/adds/changes

For example:

5 internal hours/month × $50/hour × 60 months = $15,000 Even if a vendor includes support, one platform might require substantially more internal administration than another.

7. Include network and resilience costs

VoIP depends on your network, so include incremental costs such as:

• Internet bandwidth upgrade
• Business-class internet
• Managed switches
• PoE switches
• Wi-Fi upgrades
• VLAN/QoS configuration
• Firewall upgrades
• Secondary internet connection
• UPS/battery backup

Don't automatically assign the entire existing IT infrastructure to VoIP. Include only the incremental cost caused by the solution.

8. Normalize "free phones" and discounts

This is particularly important.

If Vendor A says:

$25/user/month + $0 phones and Vendor B says:

$20/user/month + $150 phones don't immediately conclude B is cheaper.

Determine whether A has effectively financed the phones through a 24- or 36-month commitment. Also model what happens when the initial promotional period expires.

For every vendor, request:

• List price
• Discounted price
• Discount expiration
• Renewal price
• Contract term
• Minimum seats
• Early termination charges
• Hardware ownership
• Hardware replacement terms

9. Calculate the metrics management actually needs

I'd calculate at least four numbers:

Five-year TCO

Total cash expenditure over 60 months TCO per user-year

Five-year TCO ÷ total user-years This is better than simply dividing by today's headcount when companies are growing.

Effective monthly cost per active user

Five-year TCO ÷ 60 ÷ average active users Year-one cash requirement

Up-front hardware + implementation + first year's recurring costs This last number matters because the solution with the lowest five-year TCO might require substantially more cash upfront.

10. Use three scenarios

For a serious SMB comparison, I would run:

• Base case: expected headcount and usage
• Growth case: faster employee growth and additional phones
• Downside case: lower headcount/usage but contracts still require minimum payments

This exposes vendors whose pricing looks attractive only under one particular utilization level.

A simple example

Suppose an SMB has 30 users, 25 physical phones, and expects to reach 40 users.

Vendor A:

• Licenses: $25/user/month
• Phones: $150 each
• Setup: $2,000
• Support: included
• Other recurring fees: $150/month

Vendor B:

• Licenses: $20/user/month
• Phones: $250 each
• Setup: $5,000
• Managed support: $250/month
• Other recurring fees: $100/month

At first glance, B's $20 license looks substantially cheaper. But after putting 60 months of licenses + phones + implementation + support + recurring fees + expected headcount changes into the same spreadsheet, you may find that the difference is much smaller—or that the ranking reverses.

That's the key principle: compare equivalent five-year service bundles, not advertised monthly prices.

Finally, make compliance a separate pass rather than treating it as just another price line. For U.S. SMBs, the VoIP/MLTS setup needs to account for 911 access, notification, and dispatchable-location requirements; these can affect configuration and potentially cost.law.cornell.edu+1

If you're evaluating actual vendors, I can also give you a ready-to-use 5-year VoIP TCO spreadsheet structure with formulas that you can paste into Excel or Google Sheets.

9. Calculate the metrics management actually needs

I'd calculate at least four numbers:

Five-year TCO

Total cash expenditure over 60 months TCO per user-year

Five-year TCO ÷ total user-years This is better than simply dividing by today's headcount when companies are growing.

Effective monthly cost per active user

Five-year TCO ÷ 60 ÷ average active users Year-one cash requirement

Up-front hardware + implementation + first year's recurring costs This last number matters because the solution with the lowest five-year TCO might require substantially more cash upfront.

10. Use three scenarios

For a serious SMB comparison, I would run:

• Base case: expected headcount and usage
• Growth case: faster employee growth and additional phones
• Downside case: lower headcount/usage but contracts still require minimum payments

This exposes vendors whose pricing looks attractive only under one particular utilization level.

A simple example

Suppose an SMB has 30 users, 25 physical phones, and expects to reach 40 users.

Vendor A:

• Licenses: $25/user/month
• Phones: $150 each
• Setup: $2,000
• Support: included
• Other recurring fees: $150/month

Vendor B:

• Licenses: $20/user/month
• Phones: $250 each
• Setup: $5,000
• Managed support: $250/month
• Other recurring fees: $100/month

At first glance, B's $20 license looks substantially cheaper. But after putting 60 months of licenses + phones + implementation + support + recurring fees + expected headcount changes into the same spreadsheet, you may find that the difference is much smaller—or that the ranking reverses.

That's the key principle: compare equivalent five-year service bundles, not advertised monthly prices.

5-Year TCO Estimation Framework

If you can share your approximate user count , whether you prefer desk phones or softphones , and if you need CRM integrations , I can help you draft a precise itemized spreadsheet formula.

The key is to ask vendors to price the same feature set and user count, rather than comparing their headline plans. Hardware alone can add roughly $50–$300 per desk phone depending on the model and vendor.DeltaThree+1

2. Model headcount, not just today's users

Suppose you have 25 employees today but expect 30 by year three. Don't simply calculate:

25 users × monthly price × 60 Instead, model the number of paid seats in each period:

• Year 1: 25 users
• Year 2: 27 users
• Year 3: 30 users
• Year 4: 30 users
• Year 5: 32 users

Then calculate each year's actual license cost. This matters because VoIP's scalability can make one provider substantially cheaper or more expensive as the company changes size.

3. Separate "included" from "actually required"

For every vendor, create a feature checklist:

• Auto attendant
• Business SMS
• Mobile/desktop apps
• Call queues
• Call recording
• CRM integration
• Analytics
• International calling
• E-fax
• Number porting
• Conference calling
• Admin controls

If Vendor A costs $22/user/month but requires a $7 add-on for call recording and a $5 add-on for CRM integration, its relevant price isn't $22—it is $34/user/month.

This is one reason published VoIP prices can be misleading: additional features, hardware, porting, overages, and regulatory fees can materially change the actual bill.DialPhone

4. Put phones on a replacement schedule

Don't assume a phone purchased on day one has zero cost for five years.

For example:

• 20 desk phones × $125 = $2,500 initially
• 2 conference phones × $500 = $1,000
• 5 replacement desk phones in Year 4 × $125 = $625

Five-year phone cost = $4,125

Also compare a softphone-only scenario. If employees can use laptops/mobile apps, avoiding physical handsets can substantially change the economics. Hosted VoIP frequently allows softphone use without dedicated hardware.Vonage

5. Don't forget internal support

This is frequently overlooked.

If Vendor A requires your IT person to spend 4 hours/month administering the system and Vendor B requires 1 hour/month, assign an internal labor rate.

Example:

3 hours/month × $60/hour × 60 months = $10,800 That $10,800 belongs in TCO even though it doesn't appear on the vendor's invoice.

Likewise, if premium vendor support eliminates most of that work, include the support subscription and reduce the internal labor estimate.

6. Calculate three numbers, not just one

For each solution, calculate:

Five-year TCO

Total dollars spent over 60 months. TCO per user-year

5-year TCO ÷ total user-years This helps when vendors have different pricing structures.

Year-one cash requirement

Upfront hardware + implementation + first-year recurring charges. A solution can have the lowest five-year TCO but require substantially more cash upfront.

7. Run sensitivity scenarios

I'd run at least three:

• Base case: expected headcount and normal usage
• Growth case: 25–50% more users
• High-usage case: more international calls, toll-free traffic, recording, SMS, etc.

Also test a price-increase scenario. A provider charging $25/user/month today isn't necessarily cheaper over five years if its contract permits significant renewal increases.

Example

Imagine 20 users and three vendors:

Vendor A wins on total cost even though it may not have the lowest advertised monthly rate.

As a sanity check, current industry examples show why five-year modeling is useful: published estimates can range from roughly $20–$45 per user/month for cloud VoIP before hardware and other considerations, while physical phones, implementation, and support can materially change the final number.DeltaThree+1

Best practice for an SMB RFP

Ask every provider to return a 60-month, all-in quote using your exact:

users + expected growth + required features + phones + calling volume + implementation + support + taxes/fees + renewal assumptions.

Then put all vendors into the same spreadsheet. That turns a confusing "Which VoIP plan is cheapest?" exercise into a much more defensible "Which solution costs us the least to operate for five years?" decision.telecomauditguide.com

TCO per user-year

5-year TCO ÷ total user-years This helps when vendors have different pricing structures.

Year-one cash requirement

Upfront hardware + implementation + first-year recurring charges. A solution can have the lowest five-year TCO but require substantially more cash upfront.

7. Run sensitivity scenarios

I'd run at least three:

• Base case: expected headcount and normal usage
• Growth case: 25–50% more users
• High-usage case: more international calls, toll-free traffic, recording, SMS, etc.

Also test a price-increase scenario. A provider charging $25/user/month today isn't necessarily cheaper over five years if its contract permits significant renewal increases.

Example

Imagine 20 users and three vendors:

Vendor A wins on total cost even though it may not have the lowest advertised monthly rate.

As a sanity check, current industry examples show why five-year modeling is useful: published estimates can range from roughly $20–$45 per user/month for cloud VoIP before hardware and other considerations, while physical phones, implementation, and support can materially change the final number.

Step-by-Step Five-Year Estimation Framework

1. Calculate Baseline License Subscriptions
   • Determine your expected user count for year one and build a realistic scaling factor for years two through five.
   • Multiply the tiered per-user price (e.g., standard vs. premium plans for call recording or analytics) by 60 months.nextiva.com+2
2. Account for Hardware and Infrastructure
   • Decide whether to buy IP desk phones outright or use software-only softphones.
   • Include a 10% to 15% hardware refresh or expansion buffer for new hires over the five-year lifecycle.
   • Assess local network upgrades (Power-over-Ethernet switches, router Quality of Service optimization) required to support crystal-clear voice traffic.mitel.com+1
3. Incorporate Hidden Fees and Surcharges
   • Add mandatory carrier regulatory recovery fees, E911 fees, and federal/state telecom taxes, which are typically unbundled from advertised monthly sticker prices.
   • Factor in number-porting fees or international/toll-free minute overages if your team frequently calls outside domestic boundaries.telecloudvoip.com+3
4. Estimate Support and Administrative Overhead
   • Consider paid premium support tiers offered by vendors versus relying on internal staff.
   • Quantify initial employee onboarding and training hours as a productivity cost during transition.telecloudvoip.com+1

If you can share your approximate user count , whether you plan to use physical desk phones or softphones , and any required features (like CRM integration or call recording), I can help you outline a customized line-item budget template.vonage.com+3

2. Normalize the license pricing

For each solution, calculate the actual required seats, not simply employee count.

For example:

35 employees × $25/user/month × 60 months = $52,500 Then add anything excluded from the base plan—call recording, auto-attendant, contact center functionality, SMS, analytics, international calling, CRM integrations, etc.

Also model expected headcount changes. If you expect 35 users today but 45 by year five, don't assume 35 seats throughout.

3. Put phones in separately

Determine how many people actually need physical handsets.

For example:

• 25 standard IP phones × $150 = $3,750
• 5 executive phones × $250 = $1,250
• 2 conference phones × $400 = $800
• Replacement allowance = $X

Some hosted systems can use computers/mobile apps instead, while physical phones create an additional upfront or leasing cost.Vonage

Also include PoE switches, headsets, power supplies, cabling, UPS capacity, and firewall/network upgrades if they're necessary for the deployment. A comprehensive SMB TCO model should treat those as acquisition costs rather than assuming they're “free.”HubSpot

4. Capture support costs honestly

Separate vendor support from your own IT labor.

For example:

• Vendor premium support: $2,000/year
• Internal administration: 4 hours/month × $75/hour × 60 months = $18,000
• Onsite troubleshooting/training: $X
• Hardware maintenance: $X

Cloud systems may bundle upgrades and maintenance into the subscription, whereas on-premises systems can require separate software/hardware support and internal IT effort.Metaswitch

5. Include the “small print” costs

Ask every vendor to quote the same things:

• E911/emergency-service fees
• Taxes and regulatory/recovery fees
• Number porting
• Toll-free numbers
• International calling
• Minutes/usage overages
• Call recording/storage
• SMS
• Conference/video features
• Implementation
• Training
• Premium support
• Contract/early-termination fees
• Annual price increases

This is important because the advertised seat price can materially understate the actual bill once fees and required add-ons are included.Telecom Audit+1

6. Model price increases and lifecycle events

Don't simply multiply today's monthly price by 60.

For example, if a provider charges $25/user/month and increases pricing 5% annually:

• Year 1: $25
• Year 2: $26.25
• Year 3: $27.56
• Year 4: $28.94
• Year 5: $30.38

That produces a meaningfully different five-year result.

Likewise, put phone replacement, hardware refreshes, software upgrades, and contract renewals into the year in which they're expected to occur. A five-year model that omits a major upgrade can make an on-premises option look artificially cheap.CISO Marketplace Sourcing

7. Compare the results in two ways

I would calculate both:

Total five-year cost

Vendor A: $82,000 Vendor B: $91,000 Vendor C: $105,000 and

Five-year cost per user

$82,000 ÷ average number of users over five years The latter helps when vendors have different licensing models.

Then calculate average monthly cost:

$82,000 ÷ 60 = $1,367/month This makes the result easier for management to understand.

8. Run sensitivity scenarios

Don't rely on one forecast. Run at least three:

• Baseline: expected headcount and usage
• Growth: +25% users
• Downside: users decline 20% or usage increases substantially

This can reveal an important distinction: one provider might have the lowest TCO at 30 users but become expensive at 50 because of its licensing structure.

A useful procurement rule

Give every finalist the same requirements sheet and ask for a five-year quote broken down by year. Then enter those figures into your own model rather than using each vendor's ROI calculator.

As a sanity check, published examples show why this matters: one 25-user comparison calculated $41,250 over five years for hosted VoIP after including phones/setup and subscription costs, while another 20-user example arrived at $26,700 after including phones, service, and maintenance. The assumptions—not the headline price—drive the answer.Premier Broadband+1

Bottom line: for an SMB, the best VoIP choice isn't necessarily the lowest monthly license. Choose the solution with the lowest fully loaded five-year TCO at your expected scale, provided its reliability, features, security, and support meet your requirements.

$82,000 ÷ average number of users over five years The latter helps when vendors have different licensing models.

Then calculate average monthly cost:

2. Hardware & Infrastructure Costs

• IP Phones: Multiply the number of desk phones needed by the upfront hardware cost ($60 to $300+ per device depending on features like touchscreens or video). Alternatively, factor in a Hardware-as-a-Service (HaaS) monthly fee if bundled.
• Headsets & Accessories: Budget for employee headsets (wired vs. wireless Bluetooth), conference room speakerphones, and PoE (Power over Ethernet) switches if your current network gear doesn't support it.
• Network Upgrades: VoIP demands reliable bandwidth and QoS (Quality of Service). Estimate potential costs for redundant internet connections (SD-WAN or backup LTE/5G) or firewall replacements over a 5-year window.
• Replacement Cycle: Keep in mind that hardware typically degrades or becomes obsolete around year 4 or 5; budget a 1 5--2 0% buffer for mid-cycle device replacements or new hires.

3. Implementation, Migration & Support Costs

• Professional Setup Fees: Some providers offer free onboarding, while others charge tiered implementation fees ($500 to $5,000+) for number porting, complex IVR/auto-attendant configuration, and data migration.
• Internal Labor / Productivity Loss: Estimate the internal IT hours (or external managed service provider costs) required for deployment, testing, and troubleshooting. Factor in minor end-user downtime during the cutover window.
• Training & Documentation: Include time or third-party costs for staff training on softphones, mobile apps, and new desk phone interfaces.
• SLA & Premium Support: Check if 24/7 priority support or dedicated account management incurs an extra monthly or annual charge.

4. Growth & Scaling Projections (The 5-Year Factor)

• Headcount Fluctuations: Model a sliding scale. If you plan to grow by 1 5% year-over-year, your license count and hardware costs will compound. Conversely, if headcount shrinks, ensure your contract allows license reduction without penalty.
• Hidden Inflationary/Overages: Add a 5--1 0% contingency fund for unexpected usage overages, regulatory recovery fees, or carrier price adjustments over five years.

Formula Summary (Year 1 to 5 TCO)

T o t a l 5-Y e a r C o s t=(M o n t h l y L i c e n s e s×6 0)+A d d-O n S u b s c r i p t i o n s+U p f r o n t H a r d w a r e+N e t w o r k/I n f r a s t r u c t u r e U p g r a d e s+I m p l e m e n t a t i o n/S e t u p F e e s+M i d-C y c l e H a r d w a r e R e f r e s h−V e n d o r D i s c o u n t s

If you'd like, let me know:

• Your estimated user count
• Whether you plan to use desk phones, softphones, or a mix
• Any critical integrations (like Microsoft Teams or Salesforce)

I can help you build a customized line-item spreadsheet template or tailor these estimates to your specific business size.

This prevents a vendor from appearing cheaper simply because its quote assumes fewer users or fewer phones.

2. Put every cost into these buckets

Physical phones are particularly easy to overlook: they may be purchased upfront, leased, or bundled, while softphone users may need no handset at all.Vonage

3. Calculate each year separately

Use:

Five-year TCO = upfront costs + Year 1 operating costs + Year 2 + Year 3 + Year 4 + Year 5 − discounts/credits

For recurring licenses:

Annual license cost = average active users × monthly license price × 12

If headcount changes, don't simply multiply today's seats by 60 months. Model the expected user count by year.

For example, if a plan is $25/user/month:

• Year 1: 25 × $25 × 12 = $7,500
• Year 2: 27 × $25 × 12 = $8,100
• Year 3: 30 × $25 × 12 = $9,000
• etc.

Then add hardware and one-time costs separately.

4. Model phone replacement

Don't treat phones as a one-time five-year expense unless the vendor guarantees they'll last the entire period.

For example:

• 20 phones × $150 = $3,000 initially
• Replace 25% in Year 3 = $750
• Replace remaining/obsolete phones in Year 5 as appropriate

Also distinguish buy vs. lease vs. device-as-a-service. A $10/month handset can look inexpensive but cost $600 over five years.

5. Separate included support from paid support

Ask every vendor:

“Exactly what technical support is included in the quoted subscription, and what would we pay extra for?” Then model things such as:

• Vendor support
• 24×7 support
• Dedicated account management
• Onsite troubleshooting
• Moves/adds/changes
• Phone provisioning
• Network troubleshooting
• Emergency support

This matters because hosted VoIP may include maintenance, whereas a more self-managed deployment can require separate IT support.Vonage

6. Don't forget taxes, E911 and other fees

Have each vendor provide a sample fully loaded monthly invoice, not just a pricing-page quote.

Ask specifically about:

• E911
• Federal/state/local telecom taxes
• Regulatory recovery fees
• SMS registration fees
• Toll-free charges
• Number charges
• Usage overages
• Recording/storage
• Premium integrations

E911 charges can vary by jurisdiction and service configuration, so they should be explicitly modeled rather than assumed to be zero.FCC Docs+1

7. Build a comparison spreadsheet

A useful structure is:

I'd also calculate effective monthly cost per active user:

5-year TCO ÷ 60 ÷ average active users

That makes different pricing structures much easier to compare.

8. Run sensitivity scenarios

Don't rely on one forecast. Run at least three:

• Low growth: headcount stays roughly flat
• Expected: your best estimate
• High growth: significant hiring/expansion

Also test a price-increase scenario. For example, assume licenses increase 3–5% annually unless the contract locks pricing.

This can reveal that Vendor A is cheapest at 25 users but Vendor B becomes cheaper at 50 users.

The key rule

Compare “five-year all-in cost,” not “monthly license price.”

A vendor offering $20/user/month can be more expensive than a $25 vendor once phones, required add-ons, support, fees and replacement costs are included. Current 2026 pricing analyses show meaningful gaps between advertised prices and effective costs, reinforcing why an SMB should request a loaded quote.dialphone.com+1

If you're doing an actual VoIP bake-off, I can also give you a ready-to-use 5-year VoIP TCO spreadsheet template with formulas and columns for comparing 3–5 vendors.

• Low growth: headcount stays roughly flat
• Expected: your best estimate
• High growth: significant hiring/expansion

Also test a price-increase scenario. For example, assume licenses increase 3–5% annually unless the contract locks pricing.

This can reveal that Vendor A is cheapest at 25 users but Vendor B becomes cheaper at 50 users.

The key rule

Compare “five-year all-in cost,” not “monthly license price.”

A vendor offering $20/user/month can be more expensive than a $25 vendor once phones, required add-ons, support, fees and replacement costs are included. Current 2026 pricing analyses show meaningful gaps between advertised prices and effective costs, reinforcing why an SMB should request a loaded quote.