Yes, businesses can use multiple NAICS codes. Companies with diverse operations may register up to 10 classification codes through SAM.gov to accurately represent their activities. This strategic approach provides access to more government contracts, potential tax incentives, and protection against industry-specific downturns. Businesses must maintain accurate codes by conducting annual reviews and updating classifications when operations change. The proper selection of primary and secondary NAICS codes directly impacts contracting eligibility and market positioning opportunities.
Why Businesses Often Need Multiple NAICS Codes
Five key factors drive businesses to utilize multiple NAICS codes in today’s diverse commercial landscape. Most importantly, companies with diverse activities spanning different industries cannot accurately represent their operations with just one code. Successful contractors understand that strategic code selection can significantly impact their ability to win government contracts and enhance market positioning.
Businesses increasingly require multiple NAICS codes to accurately capture their diverse operations across various industries.
For example, a construction firm that also offers design services would need separate classifications for each function.
Regulatory compliance often demands multiple codes, as different government agencies have varying requirements for how businesses register their activities. The U.S. Census Bureau may assign one primary code, while the System for Award Management (SAM) allows multiple designations. SAM specifically permits businesses to register up to 10 classification codes to comprehensively represent their service offerings.
This flexibility enables businesses to accurately report their complete operational scope while maintaining proper registration across agencies. Additionally, companies using multiple codes can better position themselves for specific government contracts, expanding their potential revenue streams. Businesses can self-assign their NAICS codes based on the activities they perform, giving them control over their industry classification.
How to Properly Register and Maintain Multiple Industry Classifications
The registration and management of multiple NAICS codes requires careful attention to both procedural requirements and strategic considerations. Businesses must complete the registration process through the System for Award Management (SAM) portal, selecting codes that accurately reflect their primary revenue source and secondary activities. Understanding proper registration is crucial since a UEI number must be obtained through SAM.gov before selecting NAICS codes. Socioeconomic certifications can significantly enhance eligibility for specialized contract opportunities when combined with appropriate NAICS codes. This standardized classification system helps streamline the federal procurement process by ensuring businesses are properly categorized within their industries.
| Registration Step | Maintenance Requirement |
|---|---|
| Select primary NAICS code | Conduct annual reviews |
| Add 3-5 secondary codes | Document industry changes |
| Complete SAM verification | Implement code updates as needed |
| Maintain supporting records | Monitor NAICS system revisions |
| Submit through entity dashboard | Report changes to authorities |
Regular maintenance guarantees compliance with federal regulations. When business activities shift, code updates should be promptly implemented to maintain accurate classification. Most experts recommend reviewing NAICS codes annually to align with evolving business operations and prevent potential misclassification issues.
Strategic Advantages of Using Multiple NAICS Codes for Business Growth
Versatility in classification provides companies with substantial competitive advantages when implementing multiple NAICS codes in their business strategy.
Businesses gain access to diverse contract opportunities while positioning themselves strategically across various sectors. This market diversification helps companies build resilience against industry-specific downturns.
Companies leveraging multiple NAICS classifications can enhance their competitive positioning by tapping into sector-specific tax incentives and grants that might otherwise be inaccessible.
Strategic NAICS diversification unlocks exclusive tax incentives and grants, significantly enhancing competitive market position.
Additionally, businesses can analyze industry-specific data to identify emerging trends and adjust their strategies accordingly. While NAICS is primarily a self-assigned system, businesses should select codes that accurately reflect their revenue-generating activities.
Understanding the federal requirements helps businesses ensure compliance when bidding on government contracts using multiple NAICS codes.
Government contractors particularly benefit from this approach, as different NAICS codes have unique size standards that may qualify them for small business set-asides in certain sectors while allowing them to compete as larger entities in others. Selecting the most appropriate codes requires businesses to thoroughly review their operations to identify both primary and secondary business activities.
Frequently Asked Questions
How Many Secondary NAICS Codes Can a Single Business Register?
There is no specific limit on the number of secondary NAICS codes a business can register. Organizations can add multiple secondary classifications to accurately reflect their industry diversification across various revenue-generating activities.
Can NAICS Codes Affect Insurance Rates for My Company?
NAICS codes substantially influence insurance rates through risk evaluation processes. Insurers use these classifications during insurance assessments to determine industry-specific hazards, potentially increasing premiums by 25-60% for businesses in higher-risk categories.
Do International Businesses Follow the Same NAICS Classification System?
International businesses operating outside North America typically use other international classification systems like ISIC or NACE, though they must adopt NAICS when conducting business in the US, Canada, or Mexico per global business regulations.
How Often Should Businesses Review and Update Their NAICS Codes?
Businesses should review their NAICS codes every five years to align with official NAICS updates. Additional reviews are recommended when experiencing significant industry changes or shifts in primary business activities.
Can Incorrect NAICS Codes Trigger Regulatory Audits or Penalties?
Incorrect NAICS codes can indeed trigger regulatory compliance issues, including federal and state audits. Misclassifications may lead to tax penalties, government contract debarment, and insurance-related sanctions, creating significant audit risks for businesses.