The North American Industry Classification System, or NAICS codes, are a set of federal guidelines for classifying business establishments by their type. These codes are important to understand because they provide information about your company’s market sector and the industries in which it operates. They also give you insight into how your company can best target customers and markets. In this blog post, we will discuss 5 reasons why you should pay attention to these codes.
As we mentioned, NAICS codes are a set of federal guidelines for classifying business establishments by their type. By providing this classification system, the U.S. government can determine what industries individual businesses operate in and provide funding accordingly.
The two main ways that businesses can leverage NAICS codes are by using them to create marketing campaigns and develop government procurement strategies.
To start with the first example, you should use industry and market-specific NAICs codes to:
– Develop ad campaigns that will resonate with your core group of target customers;
– Tap into potential new markets; and
– Understand which competitors you should compare yourself against.
To get started with developing a procurement strategy, you should familiarize yourself with the:
– NAICS code that corresponds to your product or service;
– The agencies and departments which purchase goods and services within that NAICS code; and
– What type of contracting vehicles are available to best suit your needs.
Second, to develop a procurement strategy you will need to do the following:
– Understand what type of contracting vehicle you need;
– Determine agency and departmental needs; and
– Research potential contractors.
Once you have a good understanding of these points, you can put together a procurement strategy that will help your company win government contracts.
Now that we’ve covered the basics, we will look at how NAICS codes affect your business.
The North American Industry Classification System (NAICS) is the standard used by federal statistical agencies in classifying business establishments to collect, analyze, and publish statistical data related to the U.S. business economy. The NAICS code consists of six digits that identify a particular business establishment, and every company needs to have one.
The advantages of working with the federal government
Working with the federal government can be advantageous for small businesses. There are many reasons why you should work with the federal government. Here are just a few:
– You may be eligible to receive funding that helps cover development costs;
– You will gain valuable exposure and credibility;
– The federal government is the single largest purchaser of goods and services in the world, so it is necessary to work with them if you want to grow your company; and
– The federal government can be a valuable mentor and partner.
As you can see, NAICS codes are important to understand because they provide information about your company’s market sector and the industries in which it operates. They also give you insight into how your company can best target customers and markets.
To learn more about NAICS codes, our friends at Govology have a webinar by Schoonover & Moriarty. Click here to register for NAICS Codes: Six Impactful Digits for Federal Contractors.
Even if you only use one of these advantages, it’s worth working with the federal government. But did you know about these other benefits?
The federal government provides many services that are available to small businesses, including specialized training and assistance programs. Some of these programs include monetary awards in the form of cash or equipment donations via direct funding/grants which can help with costs related to marketing, employee development, operations management practices, research & development projects, and other areas of need.
The Small Business Administration (SBA) is a government organization that helps small businesses grow and succeed. One of the ways they do this is by providing grants to eligible businesses. The SBA has two primary grant programs: The Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program.
SBIR is a competitive program that encourages small businesses to engage in federal Research & Development (R&D). The program provides funding for Phase I, II, and III research projects. STTR is also a competitive program that encourages collaboration between small businesses and universities or federally-funded R&D centers.
The point is, there are many different grants available for small businesses. You may qualify! To learn more about the STTR and SBIR programs, check out this course from our friends at Govology, How the SBIR & STTR Programs Can Benefit Small Innovative Companies (2021 Update).
The second advantage to working with the federal government has to do with developing your product or service. The U.S. Department of Defense (DoD) and other agencies that purchase products within NAICS codes will allow you to test out your product or service on their agency before it is made available to the public.
The final advantage we’ll look at today has to do with your company’s marketing efforts and how working with government agencies can help you grow your business nationwide. The federal government requires companies that contract for goods or services from them to market those products all across America; this means that if you work with the government, you are automatically authorized to market your product or service in all 50 states.
This is a huge advantage for small businesses because it gives them access to new markets that they may not have otherwise had access to. And as we mentioned earlier, the federal government is the single largest purchaser of goods and services in the world, so this is a huge opportunity.
How to use NAICS codes for marketing campaigns
If you’re a business owner, the NAICS codes can help you target your marketing campaigns more accurately by providing information about your company’s specific industry. The codes can also help you identify potential customers and partners in the federal government market.
To find out which NAICS code best describes your business, visit this website and use the search tool on the right-hand side. Once you’ve found the correct code, you can use it to create a tailored marketing strategy that will help you reach your federal government target market.
Understanding the agencies and departments that purchase goods and services within a certain industry code
The government uses NAICS codes to purchase goods and services by industry. This makes it important for businesses to understand the agencies and departments that purchase goods and services within their specific industry code. For example, the Department of Defense (DoD) typically purchases goods and services within the following NAICS codes:
2211 – Manufacturing – Aircraft & related equipment 2220 – Mining (except oil and gas) 2379 – Other Services to Buildings and Dwellings 2721 – Motor Vehicle Manufacturing
In order to make it easier for small businesses to access this information, the SBA has created a series of fact sheets that provide an overview of each agency’s procurement needs within a specific NAICS code. You can find these fact sheets here from the SBA as well as the United States Census website by visiting this page and clicking on the link for your specific industry code.
In conclusion, the federal government is the world’s single largest consumer of products and services. This means if you work with them, your products or service will be automatically authorized to market all across America. The codes help businesses target their marketing campaigns more accurately by providing information about their specific industry. They also help companies understand what type of contractor they need for the specific product or service they offer. The government uses NAICS codes to purchase goods and services by industry, which is why businesses need to understand the agencies and departments that purchase goods and services within their specific industry code. And in conclusion, NAICS codes are important for businesses to understand if they want to win government contracts.
To learn more check out this webinar from our friends at Govology, Market Research for Small Businesses Selling to Big Buyers. This webinar will teach you how to locate applicable NAICS codes and commodity codes utilized by large purchasers, as well as show you how a few basic searches in USASPENDING.GOV of historical spending data can help you identify your target government agencies and prime contractors.