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Maverick Entrepreneurs

List of resources that can be consulted for starting a business

Know Your Industry

With in what industry does your business or product fall.   One way to find out is to use either NAICS (North American Industrial Classification System) and older SIC (Standard Industrial Classification) codes.   The federal government uses these codes to categorize companies into difference industries. 

What is an SIC / NAICS Industry Code?

The Standard Industrial Classification (SIC) and the North American Industry Classification System (NAICS) codes are used to identify the type of business in which a company is engaged. Many companies have more than one industry code. A variety of agencies and business sources use these codes to gather statistics and group like companies.

Standard Industrial Classification (SIC)

SIC is a 4 digit system used to define & classify businesses by their type of activity.  SIC was replaced in 1997 by North American Industry Classification System (NAICS).  Some business and resources still use SIC information.

1st   2 digits indicate the general industry group 

              58  (Eating & Drinking Places)

              59   (Miscellaneous Retail)

2nd  2 digits specify a more focused industry segment  12 or 63

              5812 – Coffee Shops

              5963 – Coffee Cart-Food Service – Retail

North American Industry Classification System (NAICS)

NAICS was first released in 1997, the system uses 6 digits.  This allows for a more detailed classification system.  NAICS is releasing updates to the classification system during 2012.  Some codes will be consolidated while others will be moved to another code.

 Coffee Shop with limited service - Example: 722515

         1st – 2 digits represent industry sector - - 72=Accommodation and Food Services

         3rd digit represents a sub sector of the industry - - 722=Food Services and Drinking Places

         4th digit identifies the industry group - - 7225=Restaurants and Other Eating Places

         5th digit identifies the NAICS industry  - - 72251=Restaurancts and Other Eating Places

         6th digit recognizes the national industry (US) - - 722515=Snacks & Nonalcoholic Beverage Bars

Why is it useful to know these codes? 
      Many resources permit either SIC or NAICS search:  Reference USA – Business Source Complete and others

Industry Specific Databases

Trends, Outlook, Current Position and Performance, Market Share