Along with the growth and diversification of the US economy came the need for more organization and data relating to tracking registered businesses. The Department of Labor, Chamber of Commerce, and Census Bureau were all curious about the trends of businesses within different industries.
With these goals in mind, the government developed codes for company identification. Learn more about SIC codes and NAICS codes below.
SIC stands for Standard Industrial Classification and refers to a 4-digit coding system that categorized businesses based on their activities. These codes differentiate macro industries (like mining versus agriculture) along with smaller differences (like soy farming versus corn farming).
SIC codes were created by the United States government in 1937 to better analyze economic activity across the country.
NAICS codes are very similar to SIC codes. In fact, NAICS (North American Industry Classification System) replaced the SIC system for the most part in 1997. The NAICS code was developed as part of the North American Free Trade Agreement with the United States, Canada, and Mexico.
NAICS codes are 6-digit codes that identify your business type. You will use your NAICS code for a variety of purposes to identify your industry.
The US Department of Labor has a SIC code lookup tool you can use. You can either search by SIC code or enter a few keywords to find the SIC code you need. This database uses the 1987 version of SIC guidelines.
The NAICS Association has a code lookup tool and a company lookup tool. You can identify your newly formed company with this search system or look up codes for your existing business. The website starts with high-level categories and lets you drill down to specific industries and business types.
If you work for a modern business, you might not have a SIC code. You might just use the NAICS system. This is a self-identification system, so you can label your business as you choose. It is important to know your NAICS code to set up certain financial accounts and to report your business to the government.