Describe your actual activity before looking for a NAICS code

Published by Federal Bid Partners LLC · October 26, 2026 · Classification

A business name rarely provides enough information to research a NAICS classification. “Technology solutions” could describe many different production activities. Start by explaining what a particular operating establishment actually does, how it does it, and what customers receive.

The Census Bureau describes NAICS as a system for classifying business establishments for economic statistics. The 2022 U.S. manual connects an establishment's industry classification to its primary activity. That is a different question from the code assigned to a particular government procurement.

Write an activity statement

Use four sentences. First, identify the operating unit and period being described. Second, state what it produces or delivers. Third, explain the main work process and resources. Fourth, identify the principal customer outcome. Prefer specific verbs such as repairs, designs, manufactures, distributes, or advises.

Separate the activity from the industry your customers occupy. Serving a hospital does not, by itself, establish that your business provides healthcare. Selling to an aircraft manufacturer does not establish that your establishment manufactures aircraft.

Fictional example: a broad consulting label

Fictional Signal Ridge calls itself a digital transformation company. Its actual recent work is writing custom software to client specifications, with a smaller amount of user training. The owner records those activities separately and assembles invoices, project descriptions, and staff assignments to support the description.

The statement now says what the establishment does rather than what its marketing promises. The team can use that statement to research relevant definitions and competing classifications. It has not yet proved the final code or small business eligibility, and it records those as separate research steps.

Collect evidence that answers the classification question

Useful records may include work descriptions, production records, revenue by activity, employee functions, and the way services are delivered. Choose a consistent reporting period and explain one-time projects. Revenue can help describe the business, but do not assume one simple percentage rule resolves every classification context.

If the establishment performs several activities, list them rather than blending them into a vague sentence. Flag whether activities are independent lines of business or supporting work within a principal service. The distinction deserves examination against the manual's definitions.

• Which establishment or operating unit is being described?
• What work was actually performed during the stated period?
• What did customers purchase?
• Which records support the activity description?
• What activities are occasional or merely planned?
• Which classification questions remain unresolved?

Finish with a plain-language activity statement and a short evidence list. Ask a colleague unfamiliar with the company's marketing to explain the work back to you. If the colleague cannot distinguish your activity from your customers' activity, revise the statement before searching codes. That small step makes the later research more focused and easier to review. Keep the first draft with the revised statement; the differences often reveal which assumptions the team originally took for granted.