Are you starting a new restaurant but have no idea what business code to use? Don’t worry; we’ve got you covered. In this blog post, we will explain the Business Code for Restaurants and provide you with all the information you need to get started.
The North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) are both used to categorize businesses in the United States. The NAICS code for a restaurant is 722511, while the SIC code is 5812.
Interestingly, according to the National Restaurant Association, there were over one million restaurant locations in the US as of spring 2023, employing approximately 10% of the US workforce.
In this article, we’ll dive into the differences between NAICS and SIC codes, explain how to find the right code for your restaurant and provide some additional tips to help ensure the success of your new venture. So, let’s get started!
What is a Business Code?
A Business Code is a numeric classification system used to identify and categorize businesses based on their primary activities. The North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) codes are two commonly used systems in the United States.
These codes help with data collection, analysis, and reporting for various government agencies and organizations.
What is a NAICS Code?
A NAICS code is a North American industry classification system used to categorize businesses based on their primary activities. It’s a standard method of identifying and classifying industries across Canada, Mexico, and the United States.
NAICS codes are important for businesses to identify their competition, gather market intelligence, and participate in government programs.
NAICS Code Meaning
The numbering system for NAICS codes works in the following manner:
- Numbers 1 and 2: Indicate the economic sector in which the company is located
- Number 3: You will find the company’s sub-sector
- Number 4: Indicates the industry group that the company is a member of
- Number 5: The company’s particular industry is identified
- Number 6: The national industry of the company is identified
As a result, every NAICS code relates to an individual business and describes what it does
NAICS Code for Restaurant
The North American Industry Classification System (NAICS) code for restaurants is 7225. This code covers businesses that provide food services and drinks to customers for immediate consumption.
Other relevant NAICS codes for the restaurant industry include 7223, which covers special food services such as catering and food trucks, and 7224, which covers drinking places such as bars and pubs.
Here is a list of all the NAICS codes related to the restaurant industry:
|Limited-service eating places||7222|
|Special food services (caterers, mobile food services, etc.)||7223|
|Drinking places (bars, pubs, nightclubs, etc.)||7224|
|Restaurants and other eating places||7225|
It’s important to note that these codes are used by government agencies for statistical purposes and may not necessarily match how businesses identify themselves. Nonetheless, they can be useful for benchmarking your business against industry averages and for obtaining certain licenses and permits.
What is a SIC Code?
A SIC code is a four-digit numerical code assigned to businesses to identify their primary industry. It stands for Standard Industrial Classification and was used by the US government until 1997 when it was replaced by the North American Industry Classification System (NAICS).
SIC Code Meaning
The SIC codes have four digits and there are more than 1,000 unique codes nationally recognized.
- The first two digits are used to identify the major group, which is then further divided into 12 groups at higher levels
- The third digit reveals a little more detail – more specific industry groupings
- The fourth digit shows the industry sector
The official US Standard Industrial Classification code is always four digits; however, some private companies use six, seven, or eight-digit versions of these codes for more specific marketing or research.
SIC Code for Restaurant
The SIC Code for restaurants falls under SIC Code 5812, which includes establishments primarily engaged in preparing and serving meals and drinks for immediate consumption.
This category covers a wide range of businesses, including full-service restaurants, fast-food chains, cafes, and even food trucks. Within this broader category, there are several specific SIC Codes that can be used to more precisely describe the type of restaurant business.
Some examples include SIC Code 5813 for Drinking Places (Alcoholic Beverages) and SIC Code 5814 for Fast Food Restaurants.
Here is a list of all SIC Codes for Restaurants:
|Drinking Places (Alcoholic Beverages)||5813|
|Fast Food Restaurants||5814|
|Cafeterias, Grill Buffets, and Buffets||5815|
|Drinking Places (Alcoholic Beverages)||5818|
Note that while the NAICS Code system has largely replaced the SIC Code system, some government agencies and data providers still use SIC Codes to classify restaurant businesses.
Understanding the relevant SIC Codes for your restaurant can be helpful when filling out government forms or conducting market research.
What is the Difference Between NAICS and SIC Codes?
NAICS (North American Industry Classification System) and SIC (Standard Industrial Classification) codes are both used to classify businesses by industry. However, NAICS is more current and widely used in the US, while SIC is an older system that is being phased out. NAICS uses a 6-digit code system, while SIC uses a 4-digit code system.
In conclusion, we have discussed the Business Code for Restaurants and its two classifications – NAICS and SIC. We have explained what they are, how to find them, and their importance in business registration and reporting.
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