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.
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.
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
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
Trends, Outlook, Current Position and Performance, Market Share