What are SIC codes?
Standard Industrial Classification (SIC) codes are four-digit numerical codes assigned to business establishments by the U.S. government in order to identify the primary business of the establishment. The classification was developed to facilitate the collection, presentation and analysis of data; and to promote uniformity and comparability in the presentation of statistical data collected by various agencies of the federal government, state agencies and private organizations. The classification covers all economic activities.
The SIC system arrays the economy into 11 divisions, that are divided into 83 2-digit major groups. These groups are further subdivided into 416 3-digit industry groups, and finally dis-aggregated into 1,005 4-digit industries.
What is a Primary SIC Code?
Each and every company will have a primary SIC code. This number indicates a company’s primary line of business. What determines a company’s primary SIC code is the code definition that generates the highest revenue for that company at a specific location within the past year.
What are NAICS codes?
NAICS (pronounced ‘nakes’) is The North American Industry Classification System (NAICS) is used by businesses and governments to classify and measure economic activity in the United States, Canada, and Mexico. NAICS is 6-digit code system that is currently the standard used by federal statistical agencies in classifying establishments (individual business locations). NAICS organizes establishments into industries according to the similarity in the processes used to produce goods or services
NAICS codes array the economy into 20 sectors, which are separated into 99 3-digit sub-sectors. These are divided into 311 4-digit industry groups, which are further subdivided into 709 5-digit industries, and finally dis-aggregated into 1057 6-digit U.S. industries.
What is a Primary NAICS Code?
Each and every company will have a primary NAICS code. This number indicates a company’s primary line of business. What determines a company’s primary NAICS code is the code definition that generates the highest revenue for that company at a specific location in the past year.
Why Do I Need These Codes?
These codes are used for segmentation purposes and depending on your business you may need one or both. Due to the sheer number of codes and niches available, we offer custom translations or categorization of these as part of our solutions to make them more easily consumable and customizable to your business.
Below we cover why you may use one set of codes over the other for your industry segmentation.
SIC codes have been defined by the U.S. Government as the most exact industry classification. SIC codes can be used for targeting purposes by accessing the 15+ million SIC code directory of companies. SIC Codes help you identify your current customers by their industry, and find new clients within the same or similar industries. SIC codes are required for state registration, federal registration, tax purposes, when filing your DUNS number, and when seeking eligibility for government contracts.
NAICS codes have been defined by the governments of the United States, Mexico, and Canada as the most exact industry classification coding system. Being able to identify your current customers by their NAICS code will help you find new clients within the same or similar industries. NAICS codes are important when seeking eligibility for government contracts.