Overview of NAICS Codes
A NAICS code identifies industries for analyzing business economy data. The first two digits indicate the sector. Companies determine their primary NAICS code based on their highest revenue activity. Multiple codes may apply if a company has diverse business activities.
Importance of Accurate NAICS Codes
Accurately self-selecting NAICS codes is beneficial for business analysis, credit decisions, and eligibility for certain small business programs. Use online tools to identify appropriate codes based on lines of business. Further assistance is available from the Census Bureau.
Understanding Primary and Secondary NAICS Codes
Primary NAICS Codes
Companies determine their primary NAICS code based on their highest revenue activity. The first two digits indicate the sector.
Secondary NAICS Codes
Secondary NAICS Codes are all the ‘other’ NAICS codes that can be attributed to the company in question. Large firms, especially investment firms, often have a wide range of secondary NAICS codes.
Eligibility and Contract Opportunities
Understanding the distinction between primary and secondary NAICS codes is crucial. Your primary code should reflect your main line of business, while secondary codes can encompass additional services you offer. Small business size standards, linked to your NAICS codes, determine your eligibility for set-aside contracts.
NAICS Code Classification
Within NAICS, 20 primary two-digit NAICS code classifications are commonly referred to as sectors. For example, all Construction related businesses are under the NAICS two-digit code of 23. After the sectors, there are 96 subcategories and 317 industry groups. You can identify subcategories by their three-digit codes and industries by their four-digit codes.
Finding Your NAICS Code
A list of primary business activities containing that keyword and the corresponding NAICS codes will appear. Choose the one that most closely corresponds to your primary business activity, or refine your search to obtain other choices.
Use Cases of NAICS Codes
Besides tracking economic activity, some other uses of NAICS codes include determining eligibility for small business loans and procurement opportunities.