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What Is A NAICS Code (Explained: All You Need To Know)

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What Is A NAICS Code

A NAICS code refers to a North American Industry Classification System code used by businesses and governments to classify and measure economic activity in the United States, Canada, and Mexico.

In cooperation with Canada and Mexico, the Federal Statistical Agencies adopted the NAICS system in 1997 to replace the Standard Industrial Classification system (or SIC).

Thus, the NAICS system was the first economic classification system that was developed based on a single economic concept.

The NAICS code is self-assigned which means that you will select the code that best classifies your business.

In essence, you are not “assigned” a NAICS code by anyone else, you pick the number that is best for your business.

Why Do You Need A NAICS Code

Although the original purpose for the adoption of the NAICS system was for statistical purposes, over the years, government agencies, trade associations, and regulatory boards started using the NAICS for their internal purposes.

For example, the Small Business Administration uses NAICS code to set size standards for particular businesses to be considered “small businesses”.

The SBA also uses the NAICS code through the System for Award Management (SAM).

You may have other government agencies who may have adopted the use of NAICS code to classify businesses, determine business eligibility for various incentives, award tax incentives, and so on.

Private businesses and companies may also use the NAICS code to broadly target other companies operating within a specific sector allowing them to better focus their marketing efforts.

How Are NAICS Codes Used

Your company may need to use its NAICS code in different situations and so it’s important to be able to identify the number that best matches your business.

Here are some examples of when you may need to use a NAICS code:

  • To bid for government purchase contracts
  • To apply for federal and state grants
  • To obtain a disadvantaged business enterprise certification (DBE)
  • To become an SBA certified company
  • To become a VA-certified veteran-owned small business (VOSB)
  • To become a service-disabled veteran-owned small business (SDVOSB)
  • To become a woman-owned small business (WOSB)
  • To apply for commercial loans
  • To get data on how many businesses are in a particular sector 

What Is The NAICS Classification Structure

The North American Industry Classification System (NAICS) has been developed by the US statistical agencies in collaboration with Canada and Mexico.

As part of their efforts to achieve an economic classification of businesses, they have assigned a code to different business sectors.

The first two digits of the NAICS code represent the business sector, namely:

  • 11: Agriculture, forestry, fishing and hunting 
  • 21: Mining, quarrying, and oil and gas extraction
  • 22: Utilities 
  • 23: Construction 
  • 31-33: Manufacturing 
  • 41: Wholesale trade 
  • 44-45: Retail trade 
  • 48-49: Transportation and warehousing 
  • 51: Information and cultural industries 
  • 52: Finance and insurance 
  • 53: Real estate and rental and leasing 
  • 54: Professional, scientific and technical services 
  • 55: Management of companies and enterprises 
  • 56: Administrative and support, waste management and remediation services
  • 61: Educational services 
  • 62: Health care and social assistance 
  • 71: Arts, entertainment and recreation 
  • 72: Accommodation and food services 
  • 81: Other services (except public administration)
  • 91: Public administration

How To Find Your NAICS Code

You can search US businesses with the Company Lookup Tool offered by the NAICS Association.

Note that there may be charges applicable.

When you lookup a business using the Company Lookup Tool, you can potentially find the following information on a business:

  • DUNS number
  • Business name
  • Tradestyle name
  • Physical address
  • Telephone number
  • Sales volume
  • Total employees
  • Employees on-site
  • Two NAICS Codes 
  • Two SIC codes
  • Top contact name
  • Line of business 

The NAICS Association will charge to provide you with a report containing the information available on a business in its database.

You can also do a NAICS lookup through the United States Census Bureau for free.

You’ll need to enter either the NAICS code of a company or a keyword based on the company’s industry.

For example, if you want to find Starbucks’s NAICS code, you’ll search for “coffee”.

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What Is NAICS Code FAQs

How do I find out what my NAICS code is?

To find out what your NAICS code is, you’ll need to first determine what is the main sector in which your business operates.

Are you a manufacturing business, transportation business, real estate company, and so on.

Once you’ve identified your company’s main line of business, you can then use a descriptive keyword to do a search on the US Census Bureau’s online NAICS search tool.

For example, if you are in the coffee business, you’ll do a search using the “coffee” keyword and then you’ll select the NAICS code that best matches your business.

Does My Business have a NAICS Code?

If you are operating a business, you should be able to classify your business activity into a primary and secondary business sectors of operation.

The NAICS code is merely a number that describes the sectors in which you consider your company to be operating.

Can I use more than one code?

Yes, you can use more than one NAICS code if your business generates revenues from different lines of business.

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Takeaways 

So there you have it folks!

In a nutshell, NAICS codes are numeric codes used to classify businesses into specific industries.

NAICS stands for North American Industry Classification System which is the first economic classification system to be constructed based on a single economic concept.

This means that companies with similar products and services or that are in the same line of business will be assigned the same NAICS code.

The NAICS code is now used by many government agencies and businesses for their own internal purposes and needs.

For example, you may need to find your NAICS code to get a government grant or qualify as a small business with the SBA.

Now that you know what is NAICS and how to find it, good luck with your research!

Editorial Staff
Hello Nation! I'm a lawyer by trade and an entrepreneur by spirit. I specialize in law, business, marketing, and technology (and love it!). I'm an expert SEO and content marketer where I deeply enjoy writing content in highly competitive fields. On this blog, I share my experiences, knowledge, and provide you with golden nuggets of useful information. Enjoy!

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