5 Ways SSA Classification System Benefits Small Businesses

affiliation definition

Affiliation definition is the basic idea behind the affiliation system is to identify a small business with similar products or services to offer and help them create an affiliate network to market to their customers. An affiliate network has many benefits to a small business’s growth, including:

Great Business Mode

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The first benefit of being included in an affiliate network is that you will be able to market your products and services to people with a high need for what you are offering. In this case, people with a high need for service will be searching on the internet. If you can put your website and service in front of them, you have a high need for affiliation definition. Therefore, the Small Business Administration has identified specific qualifications for the businesses that wish to join the program – the minimum qualifications are to have a low cost of product or service and a high need for affiliation.

Joint Network

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Under the affiliation definition, there is a specific section that says that a small business size protest must relate to a service or product offered by the parent company. This can make it difficult to join a network if the parent company is not offering a product or service that you need. There are two exceptions to this general rule. If the parent company offers an intellectual property right (IPR), then you can have this property represented by the trademark, whereas, if the product or service is not offered with an IPR, you may be able to get into a “guaranteed” or “limited” affiliation deal under the rules of the TQM program.


Also in the affiliation definition, there is a requirement that the companies joining the program must agree not to recruit their own sub-contractors. Although this provision does not appear in all of the SSA Schedule bids, as most new rules and amendments require that any changes to the rules be announced in the SSA Schedule bid notice. There is no current published list of federal government contracts that include this stipulation. However, it is probably not a wise decision for small businesses to rely on this stipulation as it could result in them being excluded from a contract just because they agreed to a subcontractor relationship with a non-traditional business.

Boosts Sales

There are several ways that the new rules regarding SSA schedules can be used to benefit a small business with an affiliation. The first way is that the SSA can set higher rates for these types of contracts to increase leverage. In other words, a company will be more likely to enter into a SSA Schedule bid if they have been given a better rate than a competitor. The second way that this new affiliation definition of SSA contracts will work is that a company that has negotiated a better rate with a subcontractor than another company will be able to negotiate a higher rate when they enter into a SSA Schedule bid.

Increases ROI

The third way that the new rules regarding SSA contracts can help a small business is that they can increase the amount of money that they can deduct from their gross income. Currently, small business owners are only able to deduct a certain percentage of their income from their taxes. The new rules now allow these contractors to deduct a larger percentage of their income. This means that this percentage can reach a rate as high as 45%. This means that a company owner who has an agreement with a subcontractor that reaches this high of a deductible can save a significant amount of money. However, this benefit is only available to a small business that is not a large multinational corporation.

Opens New Doors

The fourth way that this new affiliation rule will help small businesses is that it will open the door to attracting people with a high need for affiliation. The reason being that the rules now allow people to join affiliations even if the company is not in the SSA schedule. Additionally, the rules now allow people with a high need for affiliation to become a subcontractor for a company if there is no direct tie between the two.

Wrapping Up

The five ways that the new SSA classification system will help small business owners is by allowing them access to a large number of different benefits. Also, the fact that they will be able to save a significant amount of money on their taxes makes this new classification an attractive option for many potential clients. Also, people with a high need for affiliation can find work under this classification if their companies are not actually included in the government’s list of approved SSA Schedule V contractors. By understanding what the new affiliation rules are, a small business owner can find the most benefits for their company.

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