01 Mar Getting Found!
Are you having trouble attracting customers? Getting a loan from the bank? Maybe you would like to receive catalogs from industry manufacturers or get informed about opportunities from the government. The problem for many screenprinters is that they were assigned the wrong SIC/NAICS Code when they started their business and they are pretty much invisible.
If you want to be found by potential clients, and by the representatives of manufacturers and distributors in the screenprinting technologies this article will help you.
What is NAICS?
The North American Industry Classification System – NAICS (pronounced “nakes”) is utilized by the United States, Canada, and Mexico as a classification of businesses by their specific industry related to economic activity, or process of production. The NAICS largely replaced the Standard Industrial Classification (SIC) system in 1997, except in some government agencies, such as the U.S. Securities and Exchange Commission (SEC).
The NAICS code was revised in 2002 with changes in the Information Sector, and again in 2012 when the number of industries was reduced and modified. The NAICS code has 20 primary two-digit NAICS code classifications (aggregation levels, often called sectors). For example, all manufacturers are under the NAICS two-digit codes of 31-33. The NAICS hierarchy includes 96 subcategories and 317 industry groups. You can identify subcategories by their three-digit codes, and industries by their four-digit codes.
The SIC codes were created by the U.S. government in 1937 to help analyze economic activity across various industries and government agencies. Because the national standard changed from the use of SIC codes to the use of NAICS codes, in November 2004 the government stopped assigning SIC codes and now only assigns NAICS codes. If your Business Permit and the State Tax Certificate shows a SIC code, then you need to be concerned. Visit your local government business permit office and the state tax office to request an updated permit and certificate with the correct NAICS code.
What is Your Code?
Today, every business is classified into a six-digit NAICS code number based on the majority of activity at the business. However, the business may choose more than a single number, as many businesses are in more than one industry. To properly determine your primary NAICS code(s), you must work down the classification scheme to identify the best fit for your business.
Your business may be assigned more than one NAICS code. Utilize a secondary NAICS code if your business has characteristics of another industry. If your business has more than one location, you will need to choose a NAICS code that applies to the primary activity taking place at each location.
An example might be a manufacturer and finisher of metal parts, that are decorated by screenprinting, pad printing, and engraving. This company might have as many as six NAICS codes.
Thanks to extensive lobbying by Marci Kinter, Vice President- Government & Business Information, Specialty Graphic Imaging Association a NAICS code for Commercial Screenprinting (323113) was adopted. This number begins with 32 which signifies that companies listed are Manufacturers, the addition of 3 (323) signifies printing and related support activities. This is followed by 113, which denotes Commercial Screenprinting.
If your company is primarily a cut-and-sew apparel manufacturer who also screenprints the items you manufacturer, then you might choose 323152 (Cut-and-Sew Apparel Manufacturing) as your main NAICS, but also be listed under 323113 (Commercial Screenprinting).
There is also a number for Support Activities for Printing, which is 323120, for those who provide support to the printing industry, but who do not print as a primary economic resource.
Why Your NAICS Code is Important
If you want your business to be found, you need to assure that you are listed under the correct NAICS. For example, the Office of Management and Budget lists the following nine reasons to have the correct NAICS code:
Manufacturers and distributors, magazine publishers, trade associations, and larger organizations often use mailing lists that are tied to the NAICS code. If an organization wanted to have a large quantity of items screenprinting and were in the process of sending out a call for bids, the organization would begin with a mailing list of commercial screenprinting companies. You want to be on that list if you want a chance to bid on those large orders.
Applying for a Business Loan
Commercial lenders make industry comparisons to see how closely you compare to other businesses, so choosing the right codes for your application can give you a stronger chance of being approved for a loan. Make sure the lender uses the correct NAICS code for your business. Incorrect codes can raise red flags in the underwriting process.
If you want to compete for government contracts and grants, the federal and state governments use NAICS codes to determine if a business is eligible. Before you register with the System for Award Management (SAM) to become a federal contractor, you might want to assure that you have multiple NAICS classification codes – perhaps four or five – that best reflect your primary lines of business for which you want to be considered.
Small Business Administration
The Small Business Administration (SBA) requires NAICS codes from small businesses that wish to become SBA-certified and be eligible for government contracts set aside for certified small businesses.
The Department of Veterans Affairs (VA) requires NAICS codes for each veteran-owned small business wishing to become a VA-verified Veteran-Owned Small Business (VOSB) or Service-Disabled Veteran-Owned Small Business (SDVOSB). These verifications allow small businesses to be eligible for VA contracts.
Many federal, state, and local governments require NAICS codes from businesses for administrative, taxes, or contracting purposes.
The Internal Revenue Service (IRS) evaluates and scores your Tax Form 1040 Schedule C using the NAICS code submitted on the form.
NAICS helps group similar business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the economy. This collection contributes to data products from the Census Bureau and other federal, state, and local agencies.
Government agencies may use NAICS codes for other administrative purposes and required forms. For questions regarding other federal agencies’ uses of the NAICS system, contact the specific agency.
Can’t find the perfect fit? Sometimes, there is no perfect fit for your business at the four-digit level. For each classification level there is an option that says, “Not otherwise classified.” If no other codes are applicable to your business, select this as your NAICS identification.
Check Your NAICS Codes
Both Standard Industrial Classification (SIC) and North American Industrial Classification System (NAICS) codes identify a firm’s primary business activity. However, many screenprinting businesses were assigned the older SIC codes and were not updated to the proper NAICS code.
Do you know what code your business is listed under? In many states, it is included in the business license that you were issued when you first started your business. It is important because many companies locate a business by searching online. Online search engines usually look at these codes to build their listing of businesses in an area.
What is NAICS 323113
This 6-digit NAICS Code comprises establishments primarily engaged in screen printing without publishing (except books, grey goods, and manifold business forms). This industry includes establishments engaged in screen printing on purchased stock materials, such as stationery, invitations, labels, and similar items, on a job-order basis. Establishments primarily engaged in printing on apparel and textile products, such as T-shirts, caps, jackets, towels, and napkins, are included in this industry.
323111 Commercial Printing (except screenprinting and books): This U.S. industry comprises establishments primarily engaged in commercial printing (except screen printing, books printing) without publishing (except grey goods printing). The printing processes used in this industry include, but are not limited to, lithographic, gravure, flexographic, letterpress, engraving, and various digital printing technologies. This industry includes establishments engaged in commercial printing on purchased stock materials, such as stationery, invitations, labels, and similar items, on a job-order basis. Establishments primarily engaged in traditional printing activities combined with document photocopying services (i.e., quick printers) or primarily engaged in printing graphical materials using digital printing equipment are included in this industry.
323117 Book Printing: This U.S. industry comprises establishments primarily engaged in printing or printing and binding books and pamphlets without publishing.
323120 Support Activities for Printing: This industry comprises establishments primarily engaged in performing prepress and postpress services in support of printing activities. Prepress services may include such things as platemaking, typesetting, trade binding, and sample mounting. Postpress services include such things as book or paper bronzing, die-cutting, edging, embossing, folding, gilding, gluing, and indexing.
What are SIC and NAICS codes?
Both Standard Industrial Classification (SIC) and North American Industrial Classification System (NAICS) codes identify a firm’s primary business activity. For example, a firm with SIC 571 primarily sells retail furniture. A firm with NAICS 311 is primarily engaged in food manufacturing.
These codes were developed by the federal government and are used by the U.S. Office of Management and Budget (OMB) as well as many other U.S. statistical agencies. In 1997, OMB adopted NAICS as its new industry classification system.
Every registered firm is assigned a SIC or NAICS code. SIC codes can be up to four digits and NAICS codes can be up to six digits. The Quarterly Business Review (QBR) and the other Create a Report functions (i.e. Gross Business Income report, Statewide Taxable Retail Sales report, Local Sales/Use report) use these codes to group firms together to create informative and useful information. Because the national standard changed from the use of SIC codes to the use of NAICS codes, in November 2004 the Department stopped assigning SIC codes and now only assigns NAICS codes.
For a list of SIC codes go here – http://www.osha.gov/pls/imis/sic_manual.html
For a list of NAICS codes go here – http://www.census.gov/eos/www/naics/
Case Study 1
Years ago while driving down a street in a warehouse district in a medium-sized city in Arkansas, I noted a sign on the front of a warehouse that led me to believe that they were doing screenprinting on the premises, although the word was fulfillment. As a passed the building, I noted some screens stacked against the side of the building and quickly turned around and parked the car.
While waiting in the office for the owner, I noticed his State Resale Tax Certificate. While most businesses have this certificate hanging in the front office something caught my eye this time. A casual observance, but one that I would be able to use before I left the shop that day.
The shop owner met me with a quizzical look on his face but a smile on his lips. As he held out his hand to greet me, he commented that he had been in business for ten years and this was the first time he had received a cold call from a representative of the screenprinting technologies.
He explained that the only persons who had called on him were the salesman from the supply house where he purchased his ink and chemicals and another from the distributor where he purchased his substrates. He thought that the reason no one had called on him was that the companies within the industry were either very laid back or didn’t want his business. I assured him that this wasn’t the problem and that there must be a very good reason why business and suppliers had not been beating a path to his door.
The business was a contract textile print shop in a medium-sized town working mainly with national accounts. The owner explained that he had recently hired two salespeople to go after more national accounts that were needed to fill the available press time. The salespeople were paid on a base plus commission situation that totaled approximately $14,000. per month each. There was also the travel and expenses of sending the salespeople out on the road and the various trade shows that they attended in search of accounts.
The owner stated he would have preferred to have the national accounts calling him in lieu of having to seek them out but that during the previous ten years not one national company had ever called him looking for an estimate, let alone inquire about available press time.
When I asked the owner about his SIC code he again looked at me with that same quizzical look that had been on his face when he first walked into the front office. He stated he didn’t even know what SIC stood for, let alone whether he had one or not. I explained that SIC was the acronym for Standard Industrial Classification and that every business type had a unique SIC code.
The shop owner and I went into the front office to inspect his State Sales Tax Permit, which in his state includes the SIC code. The code that had been entered by the clerical worker when he applied for his permit was 2299, which is Textile Goods Manufacturers, Not Elsewhere Classified.
There was that look again on the owner’s face. He realized that no one could have found him by his SIC code. I explained that his business name (which was his last name followed by the word fulfillment) did not imply that he was in the screenprinting industry let alone performing contract textile printing.
At the time, the SIC codes were extremely confusing, as can be seen by this partial listing of codes a screenprinting company might choose from:
SIC 2231: Broadwoven Fabric Mills, Wool (Including Dyeing and Finishing)
Establishments primarily engaged in weaving fabrics more than 12 inches (30.48 centimeters) in width, wholly or chiefly by weight of wool, mohair, or similar animal fibers; dyeing and finishing all woven wool fabrics or dyeing wool, tops, or yarn; and those shrinking and sponging wool goods for the trade. Establishments primarily engaged in weaving or tufting wool carpets and rugs are classified in Industry 2273. This would include those who are primarily printing on wool material such as billiard table cloth.
SIC 2261: Finishers of Broadwoven Fabrics of Cotton
This major group includes establishments engaged in printing by one or more common processes, such as letterpress; lithography (including offset), gravure, or screen; and those establishments which perform services for the printing trade, such as bookbinding and platemaking. This major group also includes establishments engaged in publishing newspapers, books, and periodicals, regardless of whether or not they do their own printing. News syndicates are classified in Services, Industry 7383. Establishments primarily engaged in textile printing and finishing fabrics are classified in Major Group 22, and those engaged in printing and stamping on fabric articles are classified in Industry 2396. Establishments manufacturing products that contain incidental printing, such as advertising or instructions, are classified according to the nature of the products for example, as cartons, bags, plastics film, or paper.
It includes finishing by means of screenprinting, embossing, flocking, digital printing, sublimation and other means of finishing.
SIC 2262: Finishers of Broadwoven Fabrics of Manmade Fiber and Silk
Establishments primarily engaged in finishing purchased manmade fiber and silk broadwoven fabrics or finishing such fabrics on a commission basis. These finishing operations include bleaching, dyeing, printing (roller, screen, flock), and other mechanical finishing, such as preshrinking, calendering, and napping. Establishments primarily engaged in finishing wool broadwoven fabrics are classified in Industry 2231; those finishing knit goods are classified in Industry Group 225, and those coating or impregnating fabrics are classified in Industry 2295.
SIC 2269: Finishers of Textiles, Not elsewhere Classified
Establishments primarily engaged in dyeing and finishing textiles, not elsewhere classified, such as bleaching, dyeing, printing, and finishing of raw stock, yarn, braided goods, and narrow fabrics, except wool and knit fabrics. These establishments perform finishing operations on purchased textiles or on a commission basis.
SIC 2396: Automotive Trimmings, Apparel Findings, and Related Products
Establishments primarily engaged in manufacturing automotive trimmings, apparel findings, and related products. Included in this industry are establishments primarily engaged in printing, stamping, and embossing on apparel findings, fabric articles.
SIC 2759: Commercial Printing, Not Elsewhere Classified
Establishments primarily engaged in commercial or job printing, not elsewhere classified. This industry includes general printing shops, not elsewhere classified, as well as shops specializing in printing newspapers and periodicals for others. This would include screenprinting on a wide variety of materials, but not on textiles or finished fabric articles.
SIC 2771: Greeting Cards
Establishments primarily engaged in publishing, printing by any process, or both, of greeting cards for all occasions.
With a visit to the County Business Office he was able to get it changed to his choice of SIC Code 2269 – Finishers of Textiles, Not elsewhere Classified.
In 2004, when I checked back with the shop owner to assure that he had made the shift to NAICS, he stated he had not been aware of the change, but that he would look into it. When he called me a month later, he had found to his dismay that he was listed under NAICS 336360 – Automobile trimmings, textile, manufacturing. And, of course, he had to change it to NAICS 323113.
Case Study 2
A textile screenprinter in Houston, Texas was telling me that the manufacturer’s representatives never called on her business. I asked her what her SIC Code was and of course, she had no idea. I looked it up online and explained the problem. she classified under the SIC Code 2341: Women’s, Misses’, Children’s, and Infants’ Underwear and Nightwear.
Apparently, when she applied for her business license in the early 1970s, she told the clerk that she printed T-shirts, the clerk typed in T-shirts and the printer was issued the SIC Code of 2341. While the code includes T-Shirts, underwear women’s, misses’, children’s, and infants, it is for those establishments primarily engaged in manufacturing, not printing.
After pointing out the error to her, she went back to the County Business License office and was able to get it changed to 2759 Commercial Printing, Not Elsewhere Classified. She thought the problem was resolved, however, SIC 2759 is for establishments primarily engaged in commercial or job printing. It only includes screenprinting on glass, plastics, paper, and metal and other screenprinting; except on textiles or finished fabric articles.
Eventually, she was able to become listed under SIC Code 2261 and is now also listed under NAICS 323113 and all is fine.
If you were not assigned the correct NAICS code for your business, it will make it difficult for people to find you and cause you untold problems in a variety of ways. The power of the Internet is enormous, but it cannot think for you. Check your NAICS Code and assure it is correct. Place your NACIS number in your website metadata so that your site will come up when people search by NAICS numbers, i.e. “NACIS 323113” and change the number to your own.
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