What is a SIC Code?

The Standard Industrial Classification (SIC) system categorizes businesses by primary activities using four-digit codes. Established by the U.S. government, these codes ensure consistency in data collection and analysis across industries. They are essential for industry identification, market segmentation, and regulatory compliance.

Extended SIC Codes add more detail, offering enhanced segmentation for niche markets. These marketing-level codes support strategic planning and competitive analysis, making SIC codes invaluable for navigating today's economic landscape.

For NAICS Codes: See: What is a NAICS Code?

Diving Deeper into SIC Code Structure

The official SIC structure is organized as follows:

• 2-Digit Codes: Capture broad industry groups.
• 3-Digit Codes: Refine these groups into more specific sectors.
• 4-Digit Codes: Deliver a detailed classification of industries within each sector.
• 6-Digit Codes: Extend beyond the official structure to provide marketing-level detail for targeting specific niches. These codes offer enhanced segmentation, allowing businesses to distinguish subtle differences within industries. Explore the possibilities with extended codes: Extended SIC Code Lookup Directory.

This hierarchical structure allows for detailed analysis and understanding of industry trends and performance.

This official structure is crucial for workplace safety data and regulatory reporting, ensuring consistency and clarity in industry classification across government and research publications. See Official: OSHA SIC Code Manual

What is a Primary SIC Code?

Each and every company will have a primary SIC code. This number indicates a company's primary line of business. What determines a company's primary SIC code is the code definition that generates the highest revenue for that company at a specific location in the past year.

Extending Beyond: Marketing Level SIC Codes

Although the official SIC codes end at four digits, many businesses and market analysts have developed extended 6-digit SIC codes for enhanced segmentation. These Marketing Level SIC codes offer a refined view of an industry by appending two additional digits to the established 2-, 3-, and 4-digit classifications:

• Enhanced Detail: The extra digits allow companies to distinguish subtle differences within an industry.
• Strategic Business Use: Marketers and analysts use these extended codes to conduct in-depth competitor analyses and identify niche market opportunities.
• Supplemental Marketing Tool: These 6-digit codes enhance the standard SIC framework, offering businesses a marketing-oriented approach for deeper industry insights.

This dual classification approach allows businesses to leverage the robustness of the official SIC system while also benefiting from the more nuanced insights that come from Extended, Marketing Level codes.

Helpful SIC Code Tools

• SIC Code Directory & Lookup - Look up and identify SIC Codes by Keyword or code number
• SIC-to-NAICS Cross Reference - Convert SIC Codes to NAICS Codes
• NAICS-to-SIC Cross Reference - Convert NAICS Codes to SIC Codes

How to Read a SIC Code

The first two digits of the code identify the major industry group, the third digit identifies the industry group, and the fourth digit identifies the industry. The 6-digit codes extend beyond the official structure, providing marketing-level detail that allows businesses to target specific niches with precision. These codes offer enhanced segmentation and insight into industry subtleties not captured by the standard classifications. Please see example below:

Division
(Top Level)

• 20-39 - Manufacturing

Major Group
(2nd Level)

• 25 - Furniture and Fixtures

Industry Group
(3rd Level)

• 251 - Household Furniture

Industry
(Govt. Level)

• 2514 - Metal Household Furniture

Extended
(Mkt. Level)

• 2514-03 - Medicine Cabinets

Note: The digit "9" is used in the third or fourth digit position of the classification code to designate miscellaneous industries not elsewhere classified (NEC). These miscellaneous classifications are not comprised of homogeneous primary activity groups. They are grouped together and treated as a separate industry in order to retain the homogeneity of the other industries in the group.

SIC History

OMB - Office of Management and Budget
SIC - Standard Industrial Classification
NAICS - North American Industrial Classification System
NAFTA - North American Free Trade Agreement

How do Businesses use SIC Codes?

• Industry Identification: Companies utilize SIC codes to categorize their customers by industry. This classification aids in organizing SIC Business Lists, making it easier to analyze customer demographics.
• Market Segmentation for Marketing Campaigns: Professionals leverage SIC codes to segment markets effectively, allowing for targeted marketing campaigns and comprehensive customer research.
• Customer List Enhancement: By appending SIC codes to their customer databases, companies can gain insights into the industries their clients belong to. See: SIC Code Append.
• Comprehensive Business Listings: SIC codes provide a more detailed classification compared to NAICS codes, making them a preferred choice for generating business lists. See: SIC vs NAICS.
• Competitor Analysis: Businesses can identify competitors within their sector by using SIC codes, allowing for strategic planning and competitive analysis.
• Regulatory Compliance: Companies must use designated SIC codes when filing with the SEC to ensure accurate representation of their business activities.
• Government Contract Identification: SIC descriptions play a key role in identifying relevant government contracts.
• Registrations and DUNS Number Acquisition: SIC codes are often required for state and federal registrations, as well as when obtaining a DUNS number.
• Tax Compliance: Many tax-related forms require the submission of your business's SIC code for compliance purposes.
• Lending and Financial Services: Lenders use SIC codes to assess the industry affiliation of a company, impacting lending decisions.

Government Use of SIC Codes: Key Applications

• Promoting Uniformity and Comparability: The government employs SIC codes to ensure consistency and comparability in statistical data.
• Efficient Data Gathering and Analysis: SIC codes streamline the process of data collection and analysis, allowing government agencies to interpret industry-related information effectively.
• SEC Filings Organization: The SEC utilizes SIC codes to categorize and sort company filings, making it easier to access and understand company information.
• Tax Classification: SIC codes play a crucial role in categorizing businesses for tax purposes.
• Industry Organization for Research: SIC codes provide a numerical system that organizes industries based on revenue sources.
• Historical Context for Government Contracts: Traditionally, government contracts were identified and awarded based on SIC codes.

The Importance of Using SIC Codes for Business Success

SIC codes have been defined by the U.S. Government as the most exact industry classification. Use SIC codes for targeting purposes by accessing the 15+ million SIC code directory of companies. Identify your current customers by their SIC code and find new clients within the same or similar industries. SIC codes are required for state registration, federal registration, tax purposes, when filing your DUNS number, and when seeking eligibility for government contracts.

• What is the difference between 4,6,8-digit SIC codes?
• SIC Codes vs. NAICS Codes