NAICS and SIC....WHY USING THESE CODES IS NOT A GOOD IDEA!
The NAICS (North American Industry Classification System) and the SIC (Standard Industrial Class) codes identify products and services by type of industry and are used by the government to evaluate economic performance. The NAICS codes replaced the SIC codes in October 2000 as the codes the government uses to classify businesses and industries. The U.S., Canada, and Mexico jointly developed the new codes to provide comparability in statistics about business activity across North America.
You will need to know the NAICS codes that apply to your business in order to register with the government. You should also be able to identify all the NAICS and SIC codes that apply to your capabilities in order to help ensure your chances of success in doing business with the government. For example, government buyers looking for contractors use the codes of the products and services they wish to buy when searching for businesses profiled on the CCR and Pro-Net systems.
You can access the NAICS/SIC manual at the Small Business Administration’s web site (http://www.sba.gov). Or you can search for your products and services by keyword at the NAICS web site at http://www.census.gov. You may also go to https://www.naics.com/hrf_faq/how-can-i-determine-the-correct-naics-code-for-my-business/ which gives you some very interesting information that might be of use to you.
Although NAICS codes are now the official codes being used by the government, SIC codes may continue to be used by some agencies for some time during the transition. A word of warning looking up a NAICS code with the idea of ‘putting down everything you can think of” or “list your customers and what they do…”, this idea will give anyone looking at your profile of your company a false picture. When you look up a NAIC code search on “what you do, what service you provide or what product you manufacturer”. Also if you are using NAICS for a automated bid service, using them will give you way too many opportunities and perhaps a lot of them will not pertain to a businesses specific core capabilities.
Why are codes so bad?
Not only are keywords critical in a profile, we might even go so far as to say that codes are bad, even if you also have keywords in the profile.
Why? Because often codes classify a grouping of products or services that may include what your business sells but it may also include many other products and services that you don’t sell. When you search for a NAICS/FSC code, your Business may get a number of mis-matches which will discourage and frustrate them and potentially turn them away from government contracting.
NAICS code 541511 is a perfect example. Often small Web design companies will add this code to their profile because it is supposed to be used for bids related to Custom Computer Programming Services. But do you know that this code is also used for:
* •Microsoft Office support services
* •Voyager system upgrades
* •Nuclear Ordnance Software
* •Cobal programming
* •Quickbooks software
* •Weapons planning software
Most small web design companies would not want to see any of these bids but same code is used for all types of custom programming services.
NAICS and SIC
The NAICS (North American Industry Classification System) and the SIC (Standard Industrial Class) codes identify products and services by type of industry and are used by the government to evaluate economic performance. The NAICS codes replaced the SIC codes in October 2000 as the codes the government uses to classify businesses and industries. The U.S., Canada, and Mexico jointly developed the new codes to provide comparability in statistics about business activity across North America.
You will need to know the NAICS codes that apply to your business in order to register with the government. You should also be able to identify all the NAICS and SIC codes that apply to your capabilities in order to help ensure your chances of success in doing business with the government. For example, government buyers looking for contractors use the codes of the products and services they wish to buy when searching for businesses profiled on the CCR and Pro-Net systems.
You can access the NAICS/SIC manual at the Small Business Administration’s web site (http://www.sba.gov). Or you can search for your products and services by keyword at the NAICS web site at http://www.census.gov.
Although NAICS codes are now the official codes being used by the government, SIC codes may continue to be used by some agencies for some time during the transition.