What Is Naics Code for Small Business

Naics Code for Small Business

NAICS, or the North American Industry Classification System, is a standardized system that classifies businesses based on their primary economic activities. It helps categorize businesses into specific industry sectors, making it easier to gather and analyze financial data across North America.

NAICS is to provide a uniform framework for statistical reporting and analysis. By assigning a unique code to each industry type, NAICS enables governments, researchers, and businesses to compare economic data accurately. This classification system is crucial for understanding industry trends, assessing market opportunities, and formulating economic policies.

Structure and Format of NAICS Codes

The NAICS (North American Industry Classification System) codes are structured hierarchically to classify businesses based on their economic activities.

  • Hierarchy Levels: NAICS codes are organized into a hierarchical structure with five levels. Each level represents a progressively more detailed classification of industries, from broad sectors to specific subcategories.
  • Code Composition: A NAICS code consists of six digits arranged in a numerical sequence. The first two digits designate the sector, the third digit designates the subsector, the fourth digit designate the industry group, the fifth digit designate the NAICS industry, and the sixth digit designate the national industry.
  • Detail and Specificity: The hierarchy allows for a detailed classification of industries, enabling precise identification of business activities. For example, while the first two digits classify broad sectors like manufacturing or retail trade, additional digits refine the classification to specific activities within those sectors.
  • Updates and Revisions: NAICS codes are periodically updated to reflect changes in industries and economic activities. Revisions ensure that the classification system remains relevant and accurate for economic analysis and reporting purposes.
  • International Use: NAICS codes are used not only in the United States but also in Canada and Mexico, providing a standardized classification system across North America for comparative and analytical purposes.

NAICS Code for Small Business

Finding the right NAICS (North American Industry Classification System) code for a small business is essential for accurate classification and access to various business resources. NAICS codes categorize businesses based on their primary economic activities, helping governments, researchers, and organizations analyze economic trends and make informed decisions.

To determine your NAICS code as a small business, start by identifying the main economic activity of your business—whether it’s retail, manufacturing, professional services, or another sector. Next, consider the size standards set by the Small Business Administration (SBA) or relevant authorities for your industry. These standards typically include criteria such as annual revenue, number of employees, or other industry-specific metrics.

Once you have a clear understanding of your business activity and size classification, use online tools or visit the official NAICS website to look up the corresponding NAICS code. Verify that the code accurately reflects your business’s primary activities and meets the small business size standards.

How to Determine the NAICS Code for Your Business

Determining the NAICS (North American Industry Classification System) code for your business involves a systematic approach to classifying your primary economic activities.

Identify Your Business Activities

Begin by clearly defining the core activities of your business. Consider what products or services you offer and the primary economic function of your operations. For example, if you sell clothing, your activities might involve retail sales, inventory management, and customer service.

Use NAICS Code Lookup Tools

Access online resources like the official NAICS website or other industry-specific databases that provide NAICS code lookup functionalities. These tools typically allow you to search by keywords related to your business activities. Enter terms that describe what your business does, such as “clothing retail” or “consulting services,” to generate a list of relevant NAICS codes.

Review Industry Descriptions

Each NAICS code is accompanied by a detailed industry description that outlines the types of activities and businesses it encompasses. Carefully review these descriptions to ensure they align closely with the operations of your business. Pay attention to specific details such as the types of products sold, services offered, or manufacturing processes involved.

Consider Similar Businesses

Look at other businesses within your industry or sector to identify common NAICS codes used. This comparative analysis can provide valuable insights into selecting the most appropriate code for your own business. If you operate in a niche market or have unique business activities, consider codes that best reflect these distinctions.

Consult with Experts if Needed

If you encounter challenges or uncertainties in selecting a NAICS code, seek guidance from industry experts, business advisors, or regulatory agencies. They can provide expertise and clarification based on specific industry standards or regulatory requirements that may affect your classification.

Verify and Apply

Once you’ve identified a potential NAICS code, verify its accuracy by ensuring it accurately reflects the primary economic activities of your business. Use this code for various purposes such as business registration, tax filings, market research, government contracting bids, or statistical reporting.

NAICS Code Changes and Updates

NAICS (North American Industry Classification System) codes are updated regularly to keep pace with changes in industries and economic activities. These updates ensure that businesses are accurately categorized based on their primary operations.

Updates happen about every five years to reflect new industries emerging and changes in how businesses operate. This process involves gathering feedback from businesses, government agencies, and experts to make sure the codes match current industry practices.

Changes to NAICS codes can include adding new industries, combining existing ones, or adjusting definitions to better fit what businesses do. These updates aim to make the classification system more precise and useful for tracking economic trends and making decisions.

For businesses, staying informed about NAICS code updates is important. It helps ensure that their classification is up-to-date for things like government reporting, market research, and qualifying for business programs or contracts.


Q. How do I find the NAICS code if my business spans multiple activities?

If your business engages in multiple activities, use the NAICS code that best represents the primary activity that generates the most revenue.

Q. Do I need to update my NAICS code if my business changes its primary activities?

Yes, it’s important to update your NAICS code if your business undergoes significant changes in its primary economic activities to accurately reflect your current operations.

Q. Can NAICS codes be used internationally?

While NAICS codes are primarily used in North America (United States, Canada, Mexico), similar classification systems exist in other regions, such as the International Standard Industrial Classification (ISIC) used globally.

Q. Are NAICS codes used for tax purposes?

NAICS codes are not directly used for tax filing purposes, but they can influence tax reporting requirements and industry-specific tax incentives or deductions.

Q. What should I do if I can’t find a specific NAICS code that matches my business exactly?

If you can’t find an exact match for your business activities, select the NAICS code that closely resembles your operations. You can also seek guidance from business advisors or industry experts for assistance.


NAICS (North American Industry Classification System) code is crucial for small businesses. It helps categorize businesses based on their primary economic activities, facilitating accurate data analysis and decision-making. By correctly identifying your NAICS code, you ensure compliance with regulatory requirements and gain access to tailored business resources and support programs.

Choosing the right NAICS code involves accurately defining your business activities and considering size standards. Regularly checking for updates ensures your classification remains current and aligned with industry changes. This classification not only aids in market research and strategic planning but also enhances your ability to benchmark against industry peers and competitors.

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