What is a NAICS Code? Learn How To Find Yours | FAMR (2024)

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 two to six-digit code to categorize and group businesses.

The importance of NAICS codes

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 NAICS code your business is — the easiest way is to do a quick NAICS code lookup on the U.S. Census Bureau’s site:

• • Enter what your business does into the “NAICS Search” box, then click “Go”.
    • If you search for something too specific, no results will show up so try something broader.
  • Click the business activity 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 two to six 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 fifth digit internationally to compare the United States, Canada, and Mexico. The sixth 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 NAICS codes at the two-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 two-digit codes are:

NAICS codes vs. SIC codes

The Standard Industrial Classification (SIC) system was replaced by the development of the NAICS codes which was created in 1997. SIC codes are still used at the county and local levels, but the NAICS code list 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.

NAICS codes FAQs

Does every business have a NAICS code?

Yes, every business should possess a primary NAICS code and for small businesses seeking government contracts, they are essential. These codes help government agencies identify qualified companies for specific projects and ensure fair competition within the relevant categories.

What if I don’t have a NAICS code?

Once you’ve registered your small business, you will automatically be assigned a NAICS code that best represents the good or service you offer. The easiest way to conduct a NAICS code lookup is to head to the U.S. Census Bureau’s site and use their search tool to verify the code best matches your company.

How do I change my NAICS code?

Directly “changing” or “updating” your NAICS code isn’t possible. However, if your business operations and core offerings have changed, you might need to update your NAICS code to reflect that. In this case, you would simply update your SAM.gov registration with the new code that best represents your current business activity.

What is an NAICS code for small businesses?

There isn’t a specific NAICS code for “small business.” The code depends on your industry, not your size. Whether you’re a single-person operation or a small firm with several employees, your code will depend on the specific good or service you provide.

What is a NAICS code for LLCs?

Depending on your business goals, a NAICS code for LLCs isn’t mandatory. While most states don’t require a NAICS code during LLC formation, eight do: Alaska, Arkansas, Connecticut, Georgia, Louisiana, Mississippi, New Hampshire, and New Mexico. That being said, a NAICS code becomes essential if you aim to secure government contracts. So if you’re starting an LLC check your state requirements and plan to get a NAICS code if pursuing government contracts is a future possibility.

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 earn 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.

Ready to embark on this journey? Connect with us online today or give us a call to take the first step toward unlocking your business’s potential in the federal marketplace!