From the June 2010 issue of Entrepreneur

Nothing says success like professional presentation. Unfortunately, many entrepreneurs who wouldn't bat an eye at dropping some coin on a decent website, impressive newsletters and other collateral tend to shatter the illusion when it comes to their business phones.

Too often, small-business owners send customers the wrong message by mixing business with pleasure--routing all of their calls (work and personal) to the same number, for example, or having overly casual, unprofessional voicemail greetings. The cost and complexity of setting up traditional business PBX systems--with all the bells and whistles--have made them prohibitive for startups.

All that changed with the rise of virtual PBX and software-as-a-service telephony providers like RingCentral. Its flagship RingCentral Office offers a hosted phone service with four lines, VoIP soft-phones, fax services and real-time routing to cell phones for a monthly rate of $24.99 per user. Meanwhile, its RingCentral Mobile service does all of the routing and unifies multiple user phones under one virtual phone system for $9.99 per month per user. The San Mateo, Calif., company has brought in tens of thousands of paying users since its 2003 inception.

"I operate my business from home, but I also have employees," says Matthew Strong, owner of Matthew Allen Weddings & Events in Sacramento, Calif., and a RingCentral customer since 2005. "Just the fact that you could manage the calls in real time was the most attractive thing in the world, because in our industry having somebody always there to answer the phones is really important."

RingCentral also has attracted some pretty heavy-hitting competition. In March 2009, Google launched Google Voice, a free Internet-based telephony service that offers some of the basic features extended by RingCentral Mobile: call forwarding, voicemail to text and custom greetings by caller. As of a November report, Google had signed on close to 1.5 million users to the invite-only service.

But RingCentral's brass and loyal customers say Google Voice doesn't detract from RingCentral's core value proposition to small businesses. They point out that Google's consumer-focused service does not offer business-oriented options such as toll-free numbers, multiple extensions, fax services and auto-attendant greetings.

"Google is great for individuals, but if you're looking for a business phone system that is comparable to the enterprise-class phone systems companies use, you need something that has auto-receptionist [features], multiple extensions and all of that," says Nisha Ahluwalia, director of marketing for RingCentral. "Once [customers] understand what they're getting--call forwarding versus a complete business phone system--it becomes very clear."

But the market could shift. Google purchased Gizmo5, a VoIP and soft-phone developer, in November. The acquisition sends strong signals that the Internet behemoth will soon look to offer a service that more closely competes with RingCentral Office. Perhaps not great news for RingCentral but fantastic for small businesses searching for ways to improve how they communicate with customers.