Know Your NAICS Code!

Wednesday, October 31st, 2012

Someone once said, “Knowledge is Power!” As it relates to small business, knowledge can be the difference between failure and success! One of the key pieces of industry information I think every small business owner should know is their NAICS code.

Short for “North American Industry Classification System,” this resource allows anyone to classify their business. Why is that important? Well, once classified, you can now research with far more power into information that is relevant to your business.

For instance, by knowing your NAICS code, you can use search engines to find facts related to your industry and even pull up information on your competitors, both locally and nationwide. Chances are, you will see some competitors you never knew about!

In addition, you can now make sense out of the sea of information given by our state and national government agencies. After all, who knows more about you and your competitors than them?

The first step is to find your primary code. You may actually operate under several codes, but start with what you do most often, such as the major product or service you provide. Now, visit the NAICS website and you’ll see the 2012 NAICS Search in the upper left side of the page. It will ask you to either enter a keyword or 2-6 digit code. Well, you don’t know the code yet, so plug in a keyword that describes your type of business. The list may be long depending on how general the keyword you use. You can try two words, but if it’s not an exact match, you’ll get zero results.

Here’s an example. Let’s say you’re a child day care service. If you use the keyword Daycare, your search results would be a big goose egg. Instead, try using Day Care and you’ll get a list of different types of day care centers. Click on the ones that best represent your type of business for a full description.

Too broad a keyword search may bring up codes for related industries such as manufacturers, wholesalers, retailers, service providers, and more. An alternative is to drill down using the 2012 NAICS sectors. Day care centers fall under the 62 two-digit code.

What if you can’t figure out your NAICS code? You will see an email address and phone number you can call, or contact your local SBDC. In my next post, I will show you how to use that code to your benefit. Stay tuned!