Whether you’re applying for government contracts, seeking business certifications, or just trying to understand your market, NAICS codes are one of the most important pieces of information you’ll need. But what exactly are they?

What Is a NAICS Code?

NAICS stands for North American Industry Classification System. It’s a six-digit code used to classify businesses based on the industry they operate in. Created jointly by the United States, Canada, and Mexico, NAICS is the standard for collecting, analyzing, and publishing statistical data about the North American economy.

NAICS replaced the old SIC (Standard Industrial Classification) system in 1997.

Who Uses NAICS Codes?

NAICS codes are used by:

• Federal, state, and local governments – for contracting, regulatory, and statistical purposes

• Businesses – to identify their primary industry and research their competition

• Banks and lenders – for risk assessment and industry comparisons

• Certifying agencies – to verify eligibility for small business, minority-owned, or woman-owned programs

Why Are NAICS Codes Important?

1. Government Contracting

Most federal agencies use NAICS codes to define what types of businesses are eligible for specific contracts. For example, if a contract is set aside for landscaping services, only businesses with the appropriate NAICS code (like 561730 – Landscaping Services) can bid.

2. Small Business Certifications

Programs like SBA 8(a), HUBZone, and WOSB rely on your NAICS code to determine size standards. If your business exceeds a certain revenue or employee threshold for your NAICS code, you might not qualify as a small business.

3. Market Research & Competitor Analysis

You can use NAICS codes to find out how many companies are in your industry, where they’re located, and what federal contracts they’ve won.

How NAICS Codes Work

Each NAICS code is six digits long and follows a hierarchical structure:

How to Find Your NAICS Code

Here are a few simple ways:

• Visit https://naics.com/search/ and enter keywords related to your services

• Check your SAM.gov registration if you’re already registered

• Look up competitors in your field and see what codes they use

• Use SBA’s Size Standards Tool to see what codes apply to you

Tip: You can have multiple NAICS codes, but only one primary code that represents your main line of business.

Common Mistakes to Avoid

• Using the wrong code – Choosing the incorrect NAICS can disqualify you from set-aside contracts

• Not updating codes – If your business shifts focus, update your NAICS in SAM and with the IRS

• Mismatched codes on certifications – Be sure the same code is used across all your registrations (SBA, SAM, DSBS, etc.)

Examples of Popular NAICS Codes