Determining Your Primary Revenue-Generating Activity
If your business engages in multiple business lines, federal contracting regulations require you to identify the activity that contributes the largest percentage of your overall corporate receipts [1]. This rule is codified in 13 CFR § 121.107 to prevent companies from self-selecting codes solely to qualify for preferential contracting programs.
For example, if a firm earns 60% of its revenue from writing custom web software and 40% from database hosting services, its primary classification is Custom Computer Programming Services (NAICS 541511) rather than Computing Infrastructure Providers (NAICS 518210).
Step-by-Step Selection Process
- Describe your business's core production process in specific terms.
- Use our search tool or visit the U.S. Census Bureau NAICS page to search by keyword [2].
- Identify the correct six-digit national industry code.
- Cross-reference the selected code with the SBA Table of Size Standards to verify small business eligibility limits [3].