It’s easy to lose track of codes associated with your business when it comes to government contracting and registration. CAGE, MPIN, PCS, UEI, NAICS, and more all help identify or classify your business. This means that they all play a role in important processes such as registering with SAM, logging into the government contracting database, and finding your first contract. Let’s explore what a NAICS code is used for and how to find what yours is today.
What is a NAICS code?
A NAICS (pronounced NAKES) code is a standardized way for companies, industries, and economies to be compared and analyzed across North America. Developed by the United States, Mexico, and Canada, the North American Industry Classification System uses a 2-6 digit code to categorize and group businesses.
Why do you need one?
NAICS codes have many applications, but one of the biggest is the Small Business Administration (SBA) using them to set standards for what is considered a “small” business. This affects who is eligible for certain small business-related programs and certifications. In addition, many trade associations and regulatory boards use them to post contracts for a given NAICS code, or even offer tax incentives to certain classifications.
How to get a NAICS code
Fortunately, NAICS codes aren’t something that you have to apply for, you already fall under one. They’re not unique for individual businesses and simply identify what industry and sector you operate in, so many companies will have the same code.
How to find your NAICS code
So now you need to find what your NAICS code is — the easiest way is to do a quick search on the U.S. Census Bureau’s site:
- Enter what your business does into the “2022 NAICS Search” box, then click “Go”
- If you searched something too specific, no results will show up so try something broader
- Click the code of the result that most closely matches your business
- Verify that the description and information are actually what your business does
- That’s your primary NAICS code
An organization will typically have a primary NAICS code, but companies might also have multiple NAICS codes for different branches or divisions. This will depend on the breadth of the products or services that the business provides. Another important note is to periodically check your NAICS code(s), as they are updated every five years (with the next one being in 2027) to maintain accurate alignment with the economy.
NAICS code format
So now you have your NAICS code, but what does it actually mean? They can be anywhere from 2-6 digits, depending on the precision required.
- First 2 digits: Economic Sector
- 3rd digit: Subsector
- 4th digit: Industry Group
- 5th digit: NAICS Industry
- 6th digit: National Industry
NAICS codes are generally only used to the 5th digit internationally to compare the United States, Canada, and Mexico. The 6th digit is an extra level of detail for domestic analysis and comparison.
Let’s look at an example for the NAICS code 441221:
- 44 – Economic Sector: Retail Trader
- 441 – Subsector: Motor Vehicle and Parts Dealer
- 4412 – Industry Group: Other Motor Vehicle Dealers
- 44122 – NAICS Industry: Motorcycle, Boat, and Other Motor Vehicle Dealers
- 441221 – National Industry: Motorcycle, ATV, and Personal Watercraft Dealers
Economic sector codes
So what are the different codes at the 2-digit, or sector, level? The economy is broken down into 20 base sectors by NAICS, each of which is narrowed further with additional digits. Those 2-digit codes are:
Agriculture, Forestry, Fishing and Hunting (not covered in economic census)
Mining, Quarrying, and Oil and Gas Extraction
Transportation and Warehousing
Finance and Insurance
Real Estate and Rental and Leasing
Professional, Scientific, and Technical Services
Management of Companies and Enterprises
Administrative and Support and Waste Management and Remediation Services
Health Care and Social Assistance
Arts, Entertainment, and Recreation
Accommodation and Food Services
Other Services (except Public Administration)
Public Administration (not covered in economic census)
NAICS codes vs. SIC codes
The Standard Industrial Classification (SIC) system was replaced by the development of the NAICS codes in 1997. SIC codes are still used at the county and local levels, but NAICS was created as a classification standard for all of North America based on a single economic concept to be used by the United States, Canada, and Mexico.
Use your NAICS code to start government contracting today
Now that you’re familiar with your company’s NAICS code (or codes), it’s time to get started earning federal contracts. Whether you’re looking to register with SAM and find your first contact, or are an experienced government contractor looking to market your services to more agencies, FAMR has the experience and expertise to help.