If you're registering a new business or applying for government contracts, you've likely come across the term NAICS code — but how do you know which one is right for you?
Choosing the wrong NAICS code can limit your opportunities, especially when it comes to funding, compliance, taxes, and certifications. In this article, we’ll walk you through everything you need to know about choosing the correct NAICS code, with tips to avoid common mistakes and improve your business credibility.
What Is a NAICS Code, and Why Does It Matter?
The North American Industry Classification System (NAICS) is a standardized method used by federal agencies to classify businesses by industry. These 6-digit codes represent the primary activity of your business and are used by:
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The IRS (for tax reporting)
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The Small Business Administration (for certifications and size standards)
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The U.S. Census Bureau (for economic statistics)
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Banks and lenders (for risk analysis)
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Government contracts and grants
Put simply, your NAICS code is a data point that can open or close doors — especially if you're a startup, a minority- or woman-owned business, or pursuing government opportunities.
How Do I Choose the Right NAICS Code?
Choosing the right code isn't about guessing — it's about understanding your business’s core activity.
Step 1: Define Your Primary Revenue Source
Ask yourself:
“What service or product generates the most revenue for my business?”
That’s the key. Even if you offer multiple services, your NAICS code should reflect your main income stream.
Step 2: Use the NAICS Code Lookup Tool
Visit NAICS.com and enter keywords that describe your business.
For example:
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“Graphic design” returns 541430
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“Online clothing store” returns 454110
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“Mobile app development” returns 541511
Step 3: Read the Code Descriptions Carefully
Don’t just go by the title. Click through and read the detailed description to confirm it matches your operations.
Step 4: Check What Competitors Use
If you're unsure, search for competitors or similar businesses and see what NAICS codes they’ve registered. This helps with market alignment.
Common Mistakes When Selecting a NAICS Code
Mistake #1: Picking a code that sounds right but isn’t accurate
Solution: Focus on your actual operations and income source, not a trendy or broad industry name.
Mistake #2: Choosing multiple NAICS codes without clear primary activity
Solution: You can list secondary codes, but only one will be considered your primary for most official purposes.
Mistake #3: Not updating the NAICS code when your business evolves
Solution: Review your NAICS code yearly, especially if your business model shifts.
Real-World Example: A Digital Agency
Let’s say you run a business that:
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Builds websites
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Manages Facebook ads
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Offers branding design
Even though you offer 3 services, if 70% of your revenue comes from web development, your correct NAICS code might be:
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541511 – Custom Computer Programming Services
However, if your main income is from marketing, you may instead use:
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541613 – Marketing Consulting Services
Why the Right NAICS Code Helps with SEO and Branding
Including your NAICS code in places like:
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Your About Us page
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Your Google Business Profile
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Your certifications and proposals
…can signal your industry expertise. This not only helps with SEO rankings, but also ensures you're listed correctly in B2B directories, bid platforms, and government vendor systems.
Google often indexes these codes, so potential clients or agencies can discover you faster.
Where Is Your NAICS Code Used?
Your NAICS code is required in:
Federal & state business registrations
SBA loan or certification applications
DUNS & SAM.gov registrations
Business credit applications
Tax forms & annual filings
Bid proposals or RFQs
It’s not just a number. It’s your official industry identity.
Can I Change My NAICS Code?
Yes! You can update your NAICS code anytime by:
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Logging into your business registration portal (state-level)
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Updating your DUNS/SAM profile (for federal contractors)
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Notifying your accountant (for IRS/tax records)
Just ensure your new code accurately reflects your current operations.
Final Thoughts: Don’t Leave Your NAICS Code to Chance
Choosing the wrong NAICS code is like wearing the wrong uniform to a job interview. It may not ruin your business, but it won’t get you the right opportunities either.
Take 10 minutes to:
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Identify your main revenue activity
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Do a proper NAICS code lookup
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Use that code consistently across your applications and profiles
It’s a simple step with long-term rewards — from SEO and visibility to government eligibility and data accuracy.
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