Do you want to start a VoIP service provider company? If YES, here is a detailed guide on how to start a VoIP business with no money and no experience plus a sample VoIP service business plan template. Many users of VoIP love it because it is not only convenient and cheap but allows corporate organizations and businesses to make long distance calls as well as make use of important phone services.

It has been predicted that in the near future, VoIP will take over traditional telephones and telephony methods for corporations and businesses. Therefore, if you are looking to start the VoIP business, then you should be aware that you are likely tapping into a goldmine.

What You Must Know About VoIP Business

Just as starting any other business, it is necessary that you study all there is to know about VoIP in order to understand how it works because even though VoIP ensures that users are connected to the internet so as to conduct telephone actions without having to make use of traditional telephone services; there are still many options as well as a variety of VoIP connections that entrepreneurs have to choose from.

Once you have learnt about the fundamentals of VoIP, before you can begin steps to start your company, the first thing you will need to take care of is to ensure that a reliable and secure VoIP infrastructure has been created.

Using one server to run your business is not a bad idea but you will need several more as the business continues to grow so that you may be able to handle the increased traffic volume. Another advantage to having more than one server is that should one of your servers fail; the service to your clients will not suffer.

The amount of capital you have at hand, your level of expertise as well as the skills you possess might be a huge determinant of how you intend to start your VoIP business because even though you can start the business from scratch and generate so much money.

You can also ease into the industry by starting as a VoIP reseller in order to get your feet wet while knowing all there is to know about the industry that you are in. Whatever option you decide to go for has to be based on the realities on ground so that you do not end up wasting time and resources.

It is very important to have a business plan in place regardless of the business you are looking to start; and depending on the type of business, your business plan can either be simple or very complex in nature.

The business plan is a very important document because it allows you set out all that you intend to achieve with the business. The business plan is also very important for approaching investors especially if you do not have all the finances you need to start the business.

19 Steps to Starting a VOIP Business at Home

1. Understand the Industry

The VoIP industry has had explosive growth since it was commercially introduced in the late 1990s and then began to stabilize early as customers in the residential sector shifted to wireless devices, thereby cutting their home phone services.

Revenue for the industry has grown from 2012 to 2017 as the number of mobile internet connections as well as the adoption of broadband internet has seen a tremendous increase. However, it is not all rosy for the industry as VoIP providers are experiencing fierce competition from wireless phone carriers who are seen by the market consumers as trusted providers.

The VoIP industry generated revenue of $23 billion and experienced annual growth of 9.5 percent between the period of 2012 and 2017. There are more than 270 VoIP providers in the United States employing over 52,900 people.

The revenue boost in the industry is due to the fact that consumers in the United States have continued to adopt VoIP especially due to low cost as well as ease of installation; however, it is expected that competition from wireless carriers as well as industry regulatory developments might cause a hitch to the growth experienced in the industry. The industry has no companies with a dominant market share.

The VoIP services market based on type can be segmented into domestic VoIP call as well as international long distance VoIP calls. In 2015, the international long distance VoIP calls led in revenue generation with a 52 percent share with projections at that time expecting it to surpass 62 percent especially due to the expanding globalization between business organizations in different industries.

Commercial clients in North America and Europe generated the largest revenue especially for international long distance VoIP calls. Also, computer-to-computer segment accounted for more than 35 percent revenue share in 2015 alone.

The mobile VoIP industry which is expected to generate over $90 billion by 2024 is expected to be dominated by Android OS. The growth of this segment of the industry can be attributed to the increasing need for smartphones that has improved features such as flexible screens, augmented reality and holographic displays.

Other OS like iOS and Windows do not have the popularity of Android especially as most of the accepted smartphones used by millions of people all over the world are those that use the Android OS. The iOS is however expected to see significant growth due to the growing popularity of Apple products.

Even though Europe is one of the major contributors to the industry’s growth due to the high internet penetration in its region with the region – especially the western and central regions – accounting for more than 82 percent of internet users in 2015 alone, it has been projected that the Asia Pacific region will soon overtake Europe.

This is due to the fact that there is an increasing subscriber base in places such as India, Japan and China due to the growing economies of these countries which has led to a rise in mobile and content consumption amongst the subscribers.

The VoIP services market saw continuous growth in 2016 due to improving network structures not only within the United States but across the globe as well as this led to an increase in demand for smart devices as well as increased mobility amongst individual and corporate consumers.

The growth experienced by the market is also fueled by a rising competition amongst service providers in telecommunications and the internet. According to a research report from Infonetics, it is expected that the revenue from VoIP services on a global level will reach nearly $83 billion by the end of 2019.

VoIP has enabled a lot of businesses save cost as many small and large scale corporations see between an average of 50 and 75 percent savings after switching to VoIP. Approximately 32 percent of businesses that make use of VoIP systems do so due to its productivity boosting as well as cost saving features and this has allowed a lot of businesses to not only reduce their communications expenses but also gain the edge they need over their competitors.

The VoIP service market is expected to grow and reach $140 billion by 2022 and it is expected that the services market will continue to expand by 10 percent till 2022.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic compositions of those who make use of VoIP services include enterprise level organizations and businesses in various industries, home phone service calling card and call centers. Therefore, if you are looking to start your VoIP business in the United States of America, you should decide on what niche services you intend to go into as this will determine the kind of customers you will likely attract.

3. Decide What Niche to Concentrate On

Small service providers often focus on a small but focused customer base that offer low competition so that they can create services that will address the specific needs of the customers in that niche market.

However, focusing on one niche in order to stand out from others does not mean that you cannot create new streams of revenue in order to make your services more attractive and competitive whilst also getting a fair share of the market.

However, one thing that should be noted when it comes to niche markets is that larger service providers who have large capital and more resources are likely to have an advantage over small service providers; however the latter can concentrate on giving their customers quality service in order to have an edge.

Below are some of the niche ideas within this particular business that one can specialize in;

  • Independent Service Agent for existing VoIP service providers
  • Value Added services with VoIP
  • Consultation services for VoIP
  • VoIP wholesale provider services
The Level of Competition in the Industry

The level of competition that exists in the VoIP industry is very intense because not only do service providers have to compete amongst themselves in order to attract customers but they also have to compete against alternative carriers and so the smaller the service provider is, the less the market share to be gotten.

What most clients want when it comes to subscribing to a service operator is that the service is not only cheap, flexible and convenient but that it can also be accessed at all times and that it is also one with high quality. Also, customers are on the lookout for incentives as well and will likely switch to a provider where they can get quality, affordability coupled with incentives.

Therefore, if you are looking to start your VoIP business in the United States, you should realize that while the industry doesn’t have companies dominating; you will still be competing with several companies within and outside the country. Therefore, in order to get a fair share of the market for yourself, you will need to be creative in offering your services.

4. Know the Major Competitors in the Industry

Even though there are no dominant companies in this industry, there are still few companies that stand out over the others due to their quality of service, popularity as well as packages, incentives and a great customer service relationship that they offer to their clients.

Therefore, some of the well-known VoIP businesses in the United States as well as globally;

  • Viber Media S.r.l.
  • InPhonex LLC
  • Microsoft Corporations (Skype)
  • Sprint Corporations
  • AT&T, Inc.
  • Vonage Holdings Corp
  • RingCentral, Inc.
  • 8×8 Inc.
  • Avaya, Inc.
  • Cisco Systems Inc.
Economic Analysis

The VoIP industry started developing in the United States as a substitute to the home phones that were being provided by the Wired Telecommunications Carriers Industry (WTCI). VoIP started experiencing a surge as broadband and internet connection speeds starting surging in the early 2000s especially as it was less costly than the previous alternatives.

Also, as companies started to diversify their operations, the VoIP industry also started to diversify its markets as well. According to, the number of people using smartphone all over the world reached 175 billion in 2014 with the smartphone market penetration for that period pegged as 62 percent.

Also, 3G/4G subscriptions have grown tremendously with nearly 92 percent and 27 percent users in the United States and globally. This therefore means that these underlying technologies and networks have made it possible for VoIP to become more accessible.

There are already more than 1 billion mobile VoIP subscribers on the United States with more than 20 percent being smartphone users. The reason for this tremendous growth is because VoIP provides convenient and cost-effective calling, thereby creating a natural demand for VoIP.

Globally, the demand for VoIP services was valued at more than $83 billion in 2015 and is expected to generate more than $140 billion in 2023, with the CAGR expected to grow above 9 percent with a five year period (2016 – 2022). The growing advancement in technology as well as the development of network infrastructure has been responsible for the explosive growth experienced by the industry.

5. Decide Whether to Buy a Franchise or Start from Scratch

One of the decisions that entrepreneurs face when starting a business is whether to start the business from scratch or to buy a franchise because while each option isn’t bad, it is only the one that will best enable the business to attain its goals and objectives that should be chosen.

In the VoIP business, there are no franchise opportunities available and so the entrepreneur has to either start from scratch or become a reseller. The reseller option is similar to the franchise option as you can easily scale your business and set it up faster.

When starting your VoIP business from the scratch, it means that you will be buying and building your own system. This option allows you a lot of flexibility especially if you have the start-up capital along with skills and expertise. You can also hire those with enough experience to help you attain your intended goals and objectives.

Running any business from the scratch might be very challenging but if you remain steadfast and build the right business structure, you are likely to experience just few hitches along the way.

6. Know the Possible Threats and Challenges You Will Face

Regardless of whatever industry you might be looking to start in, you should be prepared for the threats and challenges that you will likely encounter when starting the business or whilst running the business. However, while some of these threats and challenges can be easily handled, you should have solutions in place for when they occur.

Some of the threats and challenges that you are likely going to face when looking to start your VoIP business is having to deal with existing competition from service providers within the same sector as well as those offering alternative services, internet security threats, saturation in the industry, industry and governmental regulations.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When looking to start any business in the United States, one important decision that the entrepreneur would need to make is what legal entity would be most appropriate to use in starting the business. The decision to choose the best legal entity for your business will largely depend on the kind of business you are looking to run; this is because several businesses cannot work with a certain legal entity.

As an entrepreneur looking to start a business in the United States, there are several legal entities that you can choose from and they are; sole proprietorship, partnership, Limited Liability Company (LLC), S Corporation and C Corporation. Each of these legal entities are defined by certain attributes such as flexibility, ease of setup and control, liability limit and taxation structure – that make them stand out.

Legal entities such as the LLC and Corporations are often the most common forms of legal entities chosen by entrepreneurs in this industry as they help protect the assets of the owners from creditors should the business incur debt.

The sole proprietorship does not allow the entrepreneur any sort of leeway when it comes to expanding the business of sourcing for capital. The LLC is usually easier to form than a corporation and since it is regarded as a hybrid legal entity; it possesses certain great attributes taken from all the legal entities in existence in the United States.

The LLC offers the owners great flexibility when it comes to the building the structure of the organization and it does not need a large amount of paperwork. Because LLCs are usually regarded as creation of the states, the laws guiding it might vary depending on the state where you intend to operate your VoIP business from.

Corporations usually require a great deal of paperwork and so an attorney experienced in setting up these legal entities will usually need to file the paperwork and handle all the legal aspects that comes with starting this kind of legal entity. Corporations can be split into the S Corporation and the C Corporation. The S Corporation is considered more flexible when it comes to setting up and the taxation structure.

8. Choose a Catchy Business Name from the ideas Below

When looking to start a business, one of the most important things to be taken into consideration is what the business should be called. The name of a business is very important because this is what potential customers, competitors and stakeholders will use in identifying your business.

The business name must therefore be catchy, easy to pronounce, memorable and indicative of the industry you are in. Therefore, some of the catchy business name ideas that are suitable for your VoIP business include;

  • Noveau Communications
  • Sync Corporations
  • Rink Holdings Corp.
  • Premier, Inc

9. Discuss With an Agent to Know the Best Insurance Policies for You

Having insurance policies have been very helpful especially when businesses encounter challenges from disasters that are either manmade or natural. However, while it is important that you buy insurance policies for your business, it is necessary that you get the right policies and so ensure that you engage the services of an insurance agent or broker to help you out.

Some of the insurance policies that you should consider buying when looking to start your VoIP business in the United States include;

  • General Liability Insurance
  • Casualty Insurance
  • Workers’ Compensation Insurance
  • Payment  Protection Insurance
  • Commercial Property Insurance
  • Errors and Omissions Insurance
  • Key employee insurance Life
  • Directors and Officers Liability insurance
  • Umbrella Policies
  • Data Breach Insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

The VoIP business requires handling of consumers’ data which can usually be very risky especially as this data might be passed along to a third party. It is therefore important that you protect whatever intellectual properties you deem worthy of protecting against theft no matter how stressful the process might be.

Ensure that you engage the services of an attorney that understands your kind of business and industry in order that you might be advised on what should be protected.

11. Get the Necessary Professional Certification

The only barrier to starting this kind of business is in the capital available and not any sort of professional certification.

You will however need to hire certain professionals to help you achieve your intended goals and objectives. You can also look to get professionally certified yourself in certain areas so that it can help you in running your business better.

12. Get the Necessary Legal Documents You Need to Operate

Before starting any business in the United States of America, it is important that you have the required legal documents in place. To do this right and not to lose your investment, you will need to engage the services of professionals such as a lawyer and an accountant so that they can help you get all the documents that you would need to start and run your business without encountering any challenges.

Some of the legal documents that you would therefore need to run your VoIP business include;

  • Certificate of Incorporation
  • Operating Agreement for LLCs
  • Business Plan
  • Operators License
  • Insurance policy
  • Contract Documents
  • Employment Agreement
  • Business License
  • Employer Identification Number (EIN)
  • Federal Tax Identification Number (TIN)

13. Raise the Needed Startup Capital

If you intend to run a business that has the best infrastructure and expert hands, then you would need a substantial amount of money. One thing you should note is that capital for this sort of business varies depending on the size of the company and the niche that the entrepreneur intends to focus on.

If you intend to run a massive VoIP company, then you will certainly need external investors to help in financing your business and the only way to get them to listen to you is to ensure that you have a comprehensive business plan in place.

Some of the financing options that will be available for your VoIP business include;

  • Ensure that you generate part of your start-up capital from sale of personal property and stock
  • Apply for loan from a commercial bank
  • Sell part of your equity to the right investors in exchange for capital

14. Choose a Suitable Location for your Business

Choosing the appropriate location to start a business matters a whole lot as the location can help grow or stunt your business. Even though the VoIP business can be done from anywhere, being in the hub of your target market will surely be of huge benefit than one who is far away from it.

You can either choose to build your facility from scratch or rent one. If you intend to build a facility, ensure that you have gotten permits for the location you intend to use and that you adhere to the construction requirements by the local government where you intend operating the business from.

If you are going to be leasing a facility, ensure that you have the right agreement with the landlord and that the facility can be easily accessed by your employees.

In order to get the best decision and deals, ensure that you engage the services of a real estate agent to help you.

15. Hire Employees for your Technical and Manpower Needs

Once you have thorough knowledge about the VoIP business, you will then need to create your own VoIP infrastructure. You will require hardware equipment as well as a hosted softswitch in order to route the VoIP traffic from one client to another.

Whatever server you intend to use should combine the use of software such as RTP and RADIUS so that you will be able to handle traffic as well as have a centralization verification gateway that will connect your clients to the network service.

It is important that you look to having more than one server with the software that you will be using so that as your business begins to expand, you can comfortably handle the increased flow of traffic. Also, having one server means you are being proactive because should one server fail, another server can be used without your clients having to suffer any delay.

It is important to build a solid business structure when looking to start this kind of business so that you can easily attain your goals and objectives. When hiring individuals, you will have to ensure that they are not only competent and have the required experience but that they also are committed to ensuring that you attain your goals and objectives.

Some of those you will need to hire include; Chief Executive Officer (CEO – owner), business network executive, business manager, relationship manager, human resources, IT and database manager, accountant and customer relationship executive.

From the above breakdown, you will require at least 8 key individuals to be able to run your VoIP business successfully.

The Service Delivery Process of the Business

The process involved in running a VoIP business involves first knowing what kind of niche you intend to focus on as this will determine what packages will be available for your clients.

Another process that is very important is in building the right business structure as this determines how you can attain your intended goals and objectives.

Even though the business will be capital intensive in the beginning, anyone venturing into the business can generate revenue to cover start-up costs within a reasonable amount of time.

16. Write a Marketing Plan Packed With ideas & Strategies

Having the right marketing plan for your business is very important if you intend to generate the revenue that will help grow and sustain your business. Asides from generating revenue for your business, marketing also ensures that you are able to create awareness to your intended target market as well as the industry at large.

A good marketing plan has already anticipated the needs of the intended target market so that the right strategies will be created to enable the entrepreneur get a fair share of the market.

Before you can create the right marketing strategies for your VoIP company, it is important that you conduct a thorough market research in order to first identify who your target market is, what it is they expect from you and what it is you should expect from them. It is also through market research that you can know who your competitors are and their strengths and weaknesses.

You might need to engage the services of a marketing consultant with experience in your kind of business to help you draft marketing strategies that will be effective in helping you attain your goals and objectives. The good thing about creating strategies is that they are not cast on stone and can be modified to suit the prevailing circumstances.

Aside from engaging the services of a marketing consultant, you can also hire marketing professionals who will help the business achieve a deeper level of penetration.

Some of the marketing ideas and strategies that can be used to attract your intended target market include;

  • Place adverts in newspapers and business magazines as well as on radio and television stations
  • Install billboards in various strategic locations in order to create awareness about your business
  • Build a professional website in order to advertise your services and ensure that the website has been optimized by a professional so that it could rank tops in search engines
  • Use social media platforms such as Facebook, Twitter and Linkedin to create awareness about your business
  • Ask your loyal customers to help spread the word about your business
  •  Empower your marketing executives to physically  market your VoIP business to potential customers

17. Develop Iron-clad Competitive Strategies to Help You Win

Due to how lucrative the business is, many entrepreneurs have tried to get a fair share of the market which has therefore led to an intense competition amongst operators both large scale and small scale. As an entrepreneur, you can’t look to start your business without having some laid down strategies you can use in winning over your competitors in the industry.

Some of the competitive strategies that you can develop in order to be able to win over your competitors in this industry include; giving your customers incentives from time to time and having a great customer service relationship with them.

18. Brainstorm Possible Ways to Retain Clients & Customers

Customers are very valuable to a business which is why entrepreneurs and corporate organizations all devise strategies which they can use in attracting customers to their business.

However, while it is important to attract customers to a business; it is more important to ensure that a high number of those that are attracted to the business are retained as they allow the business to generate a steady stream of revenue.

It has been found that companies that retained a high number of their customers usually ended up spending less than those that kept losing their customers and having to attract a large number of new customers every time. This is because customers that were found to be satisfied ended up using word of mouth to refer others.

In order to increase customer retention for your business, ensure that you have a great customer service because customers love where they feel valued which comes in form of prompt response to inquiries, prompt resolving of complaints as well as acknowledging of feedbacks.

Another way by which you can increase customer retention for your business is by giving your customers incentives every now and then.

19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Once you have started your business, you have to be deliberate about boosting your brand awareness as well as communicating your corporate identity in order to influence the way society perceives your business. If your intention is such that your brand can be known beyond the city where you are operating your business, then you have no choice than to boost awareness for your company.

The good thing about boosting awareness for one’s brand is that not only will you get people to notice your brand but you will also increase revenue for your business.

This is why several successful companies are still willing to spend a large amount of money every year to boost their brand awareness because they understand the great benefits that their company gets each time they engage awareness boosting.

You can leverage on several platforms to boost awareness for your brand as no entrepreneur should have to depend on a single platform alone.

Some of the strategies that you can therefore use to boost awareness for your brand and create a corporate identity for your business include;

  • Ensuring that you place adverts in newspapers and related magazines as well as on radio and television stations
  • Attend industry tradeshows in order to network and create more awareness about your business
  • Make use of social media platforms such as Facebook, Twitter, Linkedin and Google Plus in order to create more awareness about your business
  • Use your official website to promote your businesss
  • Ensure that your business is listed in reputable online directories