The Business of SIC Codes and Their Importance
- August 30, 2016
- Tag: Collaboration,Communication,JuzSolutions,JuzSolutions.com,Organization,SIC Codes,Small Business
- Published Author: JuzSolutionsAuthority
There are many different levels of business, many directly dependent on WHO you are doing business with. Doing business with the federal government means there are additional classifications that will help define the type of business you have.
One of these mysterious codes is called the SIC Code or Standard Industrial Classification code.
Each company can have multiple SIC codes, but there is only one that is considered a “primary SIC code”.
How the primary code is determined is the code definition that generated the highest revenue for that company at a specific location in the past year.
SIC codes have a number of different functions other than classifying your business.
They can/are used to:
- Segment markets for professional use or to identify key competitors in both public and private markets.
- Identify businesses or determine eligibility for government contracts
- Provide a clean cut way to collect, analyze and report economic metrics
- Used to successfully complete relevant forms and applications
Wikipedia defines the SIC code usage as “The Standard Industrial Classification SIC is a system for classifying industries by a four-digit code. Established in the United States in 1937, it is used by government agencies to classify industry areas. The SIC system is also used by agencies in other countries, e.g., by the United Kingdom’s Companies House.” https://en.wikipedia.org/wiki/Standard_Industrial_Classification
Steps to applying for a SIC Code
Selecting a SIC code is a straight-forward process. The first step is to identify the primary industry your company operates in.
Identify your industry (the first two digits identify the main industry) View Selection Tool
Within each general industry category, a SIC code breaks down into more specific industries. For common and popular industries (ie: Doctor offices, plumbers, car dealerships), there is an exact SIC code match for the industry.
For other industries (ie: Computer technology, miscellaneous manufacturing, new industries, etc) there might not be an exact match. Therefore it is important that you select a code that closely relates to your main line of business.
There is usually a NEC (not elsewhere classified) option for a SIC code within each industry.