NAICS Codes – What Do They Mean for Your Business?

NAICS & SIC Identification Tools

With such a vast array of businesses operating in the U.S., the government needs a way to classify them, analyze how each industry is performing, and collect data related to the U.S. economy. To this effect, the U.S. Office of Management and Budget developed the North American Industry Classification System of codes, known as NAICS (and pronounced ‘nakes’). So, what are NAICS codes and what do they mean to your business?

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What are NAICS codes?

No matter what your company does, there’s a NAICS code for you. Twenty sectors are included in the system, covering the entire spectrum of business activities in the U.S., from mining and manufacturing to arts and healthcare. Codes range from 2 – 6 digits: each 2-digit NAICS code defines an entire sector, and 6-digit codes classify specific industry activities. For example, the meaning of NAICS code 61 is Educational Services, and Flight Training within this sector has NAICS code 611512.

Codes are self-assigned by each business. You select the NAICS code that best defines your company’s primary activities, and so being engaged in more than one line of business,  enables you  to select multiple NAICS codes.

GSA Schedule by NAICS code

Although NAICS was originally developed for statistical purposes, the system has been adopted by various government agencies, trade associations, and other organizations that work with a wide variety of businesses. One of these is the GSA, which utilizes NAICS codes for its Multiple Award Schedule (MAS) program. 

Contractors are awarded a GSA Schedule to provide certain products and services to the government. Everything they sell is classified by a Special Item Number (SIN), and each SIN is assigned a NAICS code. Before using the GSA MAS program, you must work out the appropriate codes that apply to your business. During the most recent GSA Consolidation, NAICS codes and SINs were reassigned and are often the same number, which makes the process easier for contractors.

However, the GSA has its own system of classifying businesses; each GSA Schedule belongs to one of twelve Large Categories. This means that NAICS codes belonging to different sectors can actually fall under the same Large Category, and vice versa. For example, Commercial Photography Services (541922) and Educational Support Services (611710) both belong to the GSA Professional Services Large Category, but fall under different NAICS sectors: Professional, Scientific, and Technical Services (54); and Educational Services (61). 

NAICS codes and business size 

NAICS codes not only designate the industry classification of a business, but also the size of a business. Small businesses are defined by either their revenue or number of employees, and what counts as ‘small’ differs according within each NAICS code. Finding out whether you qualify as a small business is simple: just use the SBA Size Standards tool, enter your NAICS code and your annual revenue/number of employees. For example, Commercial Photography Services (541922) are considered a small business if they have an annual revenue of $8m or less; and an Institutional Furniture Manufacturing company (337127) qualifies as a small business if it has 500 employees or less. You can also look up your codes in the Table of Small Business Size Standards.

How do NAICS codes help you search for GSA contracting opportunities?

Now you understand the definition of NAICS code. But what do NAICS codes actually mean to your business? 

Every time a federal agency advertises a business opportunity, it is assigned to at least one NAICS code. This allows GSA to track the number of contracts by each industry, and buyers can direct their requests to the most relevant contractors. It also offers several benefits to GSA Schedule holders:

  • GSA contractors can search for opportunities according to their specific code. Sometimes, government solicitations are vaguely worded, so if you’re unsure whether the request is a good fit for your company, just check the assigned NAICS code.
  • Researching competitors can be a long process. Schedule holders can easily look at their competition by searching their NAICS codes on GSA platforms.
  • Having the correct NAICS code can make you eligible for government set-asides. Agencies have to meet small business spending regulations and so some opportunities are set aside for GSA contractors that are designated as small businesses, as well as some for those who qualify as ‘other than small’ businesses.

Get help with your GSA NAICS codes

Knowing what the NAICS codes stand for can mean success in finding government requests, deciding whether business opportunities are right for you, and correctly marketing your company. If you need help with choosing your codes and understanding how important NACCS are to your business, get in touch with Price Reporter. Our expert consultants are happy to help!

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  • What NCAIS code would I need for a sole proprietorship selling clothing? (resales and manufacturing)

  • I just get my business llc registered and I want to get naics, can you help me with this

  • 561900 is the NAICS code for Other Support Services. It covers the wage and employment data, gathered from employers of various sizes, from all the urban, suburban, and rural areas of the US, within every state, including the District of Columbia.

  • What is business code 561900?

  • 6241 – Individual and Family Services.

  • Is there a NAICS code for individuals?

  • NAICS codes must be provided along with tax returns, according to the IRS. In most instances, they will be shown on the upper right corner of the forms.

  • Where do I find my NAICS code on tax return?

  • The NAICS codes are utilized by financial institutions, such as banks and insurance companies, to evaluate potential risks associated with lending funds to small businesses. The NAICS system compiles and synthesizes available data, in order to evaluate the various relevant factors.

  • How do banks use NAICS codes?

  • Factors such as business size by the number of employees, and the overall dollar receivables within a given industry, are used to determine your NAICS code size standard.

  • What is the size standard for NAICS?

  • To add a NAICS Code, must first search for the NAICS number or category, then click “search”. Once the NAICS search results displays, click the code that they need so that it is highlighted in blue. Click the “add” button. Code should be added to the right hand panel.

    To get a NAICS Code assigned, the NAICS number, or category should first be located. After clicking on “search”, numerous results should come up; choose the applicable one, by highlighting it in blue, and click to “add”. The code should now be showing as added, to the panel on the right.

  • How do I create a NAICS code for my business?

  • NAICS Code: 561330 Professional Employer Organizations

  • What is NAICS code for Gig workers?

  • NAICS codes must be provided along with tax returns, according to the IRS. In most instances, they will be shown on the upper right corner of the forms.

  • How do I find my NAICS code on my tax return

  • NAICS, i.e. the North American Industry Classification System is a code consisting of six digits, used to categorize companies according to the industry segment that they specialize in. This is done for the ease and convenience of administration of the Internal Revenue Code. Internal Revenue Code will be required by any lender, should one choose to apply for the Paycheck Protection Program (PPP).

  • Do I need a NAICS code for PPP?

  • Business Activity Codes used by the IRS stem from NAICS, i.e. North American Industry Classification System. So, a more thorough and easily searchable directory of 981 NAICS codes, with their descriptive titles, was introduced by Axiom Valuation. These exclude fishing, forestry, agriculture, fishing and hunting.

  • The Sole Proprietor’s code is as follows: ZIP 60534, NAICS 722511, SIC 5812.

  • What is NAICS code for sole proprietorship?

  • Is NAICS the same as business activity code?

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