Learning the Standard Industrial Classification (SIC) basics can help businesses gain a better understanding of the U.S. economy. SIC codes are four-digit codes used to identify various industries within the business marketplace.

For more than 60 years, SIC codes have been instrumental in helping businesses gather and analyze information about the U.S. marketplace. Since the first introduction of the Standard Industrial Classification system, there has been a wide range of revisions to reflect the evolving business environment. Consider the following tips to help you learn more about the Standard Industrial Classification (SIC) basics.

1. Read about how SIC codes help with industrial classification.

2. Learn where to find SIC codes.

3. Compare SIC codes with the North American Industry Classification System (NAICS).

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Use SIC codes to learn more about business industries

SIC codes are used to index businesses based on their primary business activities. While this is one of the most accurate company coding systems available, the system does have its flaws. The way in which the system codes companies isn't regulated, which means that each source can index companies as they see as most appropriate. This creates company SIC code inconsistencies from one source to the next, so the first step in learning the basics is understanding how these codes are used.

I recommend: Check out the Montague Institute Review to learn more about SIC codes. You can also read more about SIC code listings compared to NAICS listings by reading over the Bureau of Labor Statistics website.

Find accurate standard industrial classification listings

Because the U.S. government established SIC codes, there are several government resources from which to obtain SIC code listings. For example, when learning the basics of SIC codes, the Securities and Exchange Commission can explain how these codes are used for assigning review responsibility as it pertains to the company's EDGAR filings.

I recommend: Visit the Securities and Exchange Commission website for more SIC information and a SIC code listing. You can also find a SIC code listing and information about industries by visiting the U.S. Department of Labor website.

Evaluate differences between SIC codes and the NAICS coding structure

Despite changes in SIC codes, the system has received criticism regarding its accuracy and ability to keep up with the rapidly evolving business environment. As a result, the NAICS, which was introduced in 1997, is gradually being used more and is taking the place of the SIC code directory. The NAICS uses a six-digit coding structure that identifies industries in the United States, Mexico and Canada. Because both systems are widely used, many directories will segment companies by a standard industrial classification number and a NAICS code.

I recommend: Read more about NAICS by checking out the U.S. Census Bureau website. Learn more about the differences between SIC codes and the NAICS coding structure by visiting the University of Pittsburgh website.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  One of the major problems of the SIC code system is that it was designed to identify company processes instead of the type of business in question. This creates problems when attempting to evaluate competitors in a particular industry, because top companies based on business type could be listed under an entirely different SIC code.

The Standard Industrial Classification was created by the United States government as a means of classifying industries by the use of a 4-digit coding system to collect economic data on businesses. A SIC code directory can be a useful tool for enhancing your business if you know how to use it. Conducting company research by targeting the results to standard industrial classification code is the most efficient use of your resources.

Most establishments conduct business across several SIC codes, and so the entity may have multiple SIC code listings. Company SIC codes are self reported which means that they are obtained from information the business establishment provided on census or survey reports. Listed below are just some of the ways that you can use company SIC codes.

1. Decide on a list of industries to market to by SIC information

2. Create mailing lists by standard industrial classification number

3. Recruit employees by industrial classification

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Target the right SIC codes in your search

SIC code lookup can be somewhat confusing because the classifications are extremely broad. They were purposefully created broadly to encompass many classifications, but you will have to find SIC codes that are precisely what you need. If you are looking to sell to hospitals then you might select code 8062 for General Medical & Surgical Hospitals rather than code 6324 which is for Hospital & Medical Service Plans.

I recommend: Browse these free electronic SIC manuals by OSHA, EHSO and Websters Online to target the best SIC code match for your search.

Find SIC codes to create mailing lists

Once you have determined which company SIC codes are best suited for your products and services, purchase mailing lists. The mailing lists allow you to focus your advertising dollars on the best possible prospects for your products.

I recommend: There are a lot of service providers for mailing lists. Marigold Technologies, Salesgenie, ListsAreUs and Hoovers are online mailing list providers that are easy to use.

Recruit employees by industrial classification

After you have narrowed your search to the industrial classification of your choice, you can find potential new employees. Purchase mailing lists comprised of specific job titles and/or functions within your targeted SIC code. This will enable you to recruit people who already work in your industry.

I recommend: SIC codes, while still widely used have been replaced by the 6-digit North American Industry Classification System (NAICS). Many sites offer SIC to NAICS conversions. Try the U.S. Census Bureau or NAICS Association for SIC to NAICS conversion tables. You can search Corporate Affiliations by SIC, NAICS and by personnel title and job function to target your recruitment activity.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Before purchasing any industrial classification mailing list, find out how often the information is updated. Out of date data will be useless.

Standard Industrial Classification is a system of codes that cover all types of American businesses. Compiled by the U.S. government, the standard industrial classification code applies a four-digit number to a given industry for statistical research and categorization.

Commonly known as SIC codes or SIC, industrial classification listings are mostly utilized by researchers, employers, government agencies and those in human resources. In 2003, the standard industrial classification code was replaced with the North American Industry Classification System (NAICS), but the SIC code listings are still used. When considering Standard Industrial Classification (SIC) education and training:

1. Realize that SIC code listing manuals exist allow the user to look up any given industry

2. Understand that there is only one standard industrial classification number for each industry

3. Know that the SIC code listing of a business helps track research and understand that business

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Discover what SIC information tells the business researcher or owner

Before applying SIC code information to business analysis or research, it is important to understand exactly what SIC codes are. A little background education will make utilizing the code listings easier as well as allow managers and employers transfer the information to employees.

I recommend: The University of Pittsburgh explains what SIC codes are, provides a brief history of the classification system as well as gives links to additional online information. Illinois State University elaborates on how the government compiles SIC are and their relationship with the newer NAICS code system.

Find SIC codes and SIC listings online to assist with business research

Originally contained in a hardback book, the industrial classification system is now available online. Established business and government agencies provide an easy-to-use searchable database to help business researchers and statisticians access SIC listing information. Using the online database is a quick way to learn the classification system.

I recommend: The Occupational Safety & Health Administration (OSHA) website provides a searchable SIC code database by keyword or SIC code lookup as well as a link to view and understand the structure of the original print version of the data. The NAICS Association offers both a SIC code and an NAICS code searchable database. It also includes an online form to request a code for a business.

Comparing SIC codes with NAICs codes help businesses stay informed with changing systems

Even though some companies and government websites still utilize the original SIC code listings, most are now using the longer NAICS codes. For some time, companies will continue to use them side-by-side and it's important for the small business owner to educate themselves on where they stand and how to find their business under each system.

I recommend: U.S. Census Bureau places tables side by side and offer instructions in how to compare. The Washington State Department of Revenue explains how to compare the two code databases as well as points out important differences between the two systems.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  You can purchase the 1997 SIC code directory cheaply on online auction sites or in second hand bookstores, offering a more hands on guide for the more traditional researcher.

Standard Industrial Classification (SIC) uses a four-digit coding system to collect economic information by industry. Many companies may have several SIC codes that they fall under. The SIC codes have been replaced with the NAICS coding system, but when going through older documents, it is often necessary to understand the SIC system. When reviewing Standard Industrial Classification (SIC) codes, look over the SIC key terms first to help you better understand the information.

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NAICS

The NAICS has replaced the SIC for coding and classification. The North American Industry Classification System, or NAIC,S utilizes a six-digit hierarchical coding system to classify economic activity in 20 industry sectors.

I recommend: The Occupational Safety & Health Administrations supplies more details about the NAICS. Visit the U.S. Bureau of Labor Statistics Division of Information Services to find more about the North American Industry Classification System. U.S. Census Bureau also has NAICS information available online.

EDGAR

EDGAR stands for Electronic Data Gathering, Analysis and Retrieval system. EDGAR processes time sensitive information quickly to provide information about publicly traded companies.

I recommend: The U.S. Securities and Exchange Commission provides more information about EDGAR. WebMediaBrands also has information about EDGAR. Visit Vintage Filings to learn even more.

OMB

The OMB is the Executive Office of Management and Budget. The OMB creates and manages the budget for the President of the United States.

I recommend: The Center on Budget and Policy Priorities provides details about the OMB. The White House has even more information regarding the OMB.

ECPC

The ECPC, or Economic Classification Policy Committee, works with Bureau of Economic Analysis, Bureau of Labor Statistics, Census Bureau, Office of Management and Budget, U.S. Department of Agriculture, Bureau of Transportation Statistics, Energy Information Administration, and the Federal Emergency Management Administration to create economic policies and regulations.

I recommend: CBS Interactive provides more information about the Economic Classification Policy Committee. The White House supplies details about the ECPC.

BEA

BEA, or Bureau of Economic Analysis, is a government agency that works with other agencies to produce economic account statements. These statements provide an up-to-date, overall picture of the economy.

I recommend: Visit the Bureau of Economic Analysis website to find more information about what they do. Economagic.com has information about reports and statistics done by the BEA.

NAPCS

NAPCS, or the North American Product Classification System, is used in Canada, Mexico and the United States to organize and recognize products and industries. The NAPCS's main purpose is to identify products and services and link them to the industries that create and use them.

I recommend: Discover more information about NAPCS at Statistics Canada. The U.S. Census Bureau also provides details about NAPCS.