Understanding What SIC Codes Are
The initial SIC stands for Standard Industrial Classification. SIC codes are special numbers given by the United States government as a form of identification for the primary business of an establishment. It is a special code that makes the collection of data, the operability of a firm and the uniformity of statistical collection faster and easier. Every code assigned represents specific business activities. This means that there is a code for all economic ventures from fishing to forestry, personal business to professional administration.
If you want to read a code, there is a formula to follow. These four digits are divided into three. The first group is represented by the first two digits of the code, and they represent the major group of the industry. The third digit is used to identify the industry group while the fourth digit represents the industry itself.
For example, the code 3672 is broken down as follows. The first two digits, 36, represent the electronic and other electric equipment group of industries. 367 represent electronic components and accessories. Finally, the whole digit, 3672, represents printed circuit boards.
The codes have not always been the same. Before 1987, the economic industries and activities were quite different and were more in line with economic activities of the fifties, sixties and seventies. However, the government revised every code to represent current and future business activities.
It was decided in 1992 that there would be several other changes, a direct result of a conference a year before. It was resolved that they would shift from a four figure code to a six figure code to help integrate the entire North American region. The transition is still in progress.
There are websites dedicated to helping people identify the correct SIC codes for their businesses. It is important to know the correct code for your business. It helps with reading and analyzing governmental statistical data.