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Getting Accurate NAICS Classification for Your Cybersecurity Company
Why Correct NAICS Codes Matter for Cybersecurity Firms
Having an accurate NAICS Code for Cybersecurity assigned to your cybersecurity business is important for proper classification, bidding on government contracts, statistics tracking, and industry analysis.
Since cybersecurity crosses multiple industries like technology, consulting, and more – selecting the codes that best reflect your core offerings is vital.
Understanding The NAICS Hierarchy and Structure
NAICS, short for North American Industry Classification System, is the standard used by Federal agencies in classifying business establishments for statistical purposes. The digit hierarchy goes from 2 to 6 digits:
- 2-digit codes are the broadest business sector categories
- 3-digit codes represent subsectors
- 4 and 5-digit codes are more industry-specific
- 6-digit codes assign the most narrowly defined industries
New industries like cybersecurity emerge faster than NAICS codes can keep up, so multiple codes often need to be combined to properly capture all facets of a cybersecurity provider’s services.
Key Base Codes Used By Cybersecurity Companies
While there is no one universal “cybersecurity” NAICS code yet, common base codes utilized include:
541511 – Custom Computer Programming Services
Covers custom software development, programming, and consulting services related to cyber protection.
541512 – Computer Systems Design Services
Includes planning and designing digital solutions for cyber defense needs.
541611 – Administrative Management & General Consulting
Applies to general cybersecurity consulting and advisory services.
Getting The Most Suitable NAICS Mix For Your Offerings
Since most cybersecurity firms offer multiple types of solutions, utilizing a mix of codes instead of just one base code is often necessary for accurate classification.
Factors To Consider:
- The breadth of security services – policy, risk, infrastructure, endpoint, etc.
- Industry verticals you serve
- Advisory vs implementation mix
- Managed services provided
- Technology focus – cloud, networks, applications, etc.
Adding relevant 3 to 6-digit NAICS codes to your base codes provides more specificity.
NAICS Code for Cybersecurity Updates Coming in 2024
With rising cyber threats, there have been requests to establish dedicated 6-digit NAICS classifications for sub-sectors like:
- Cybersecurity software publishing
- Cybersecurity consulting services
- Cybersecurity managed services
This proposed segmentation will allow more accurate tracking, analysis, and policy-making around one of the fastest-growing industries.
Conclusion
Selecting the NAICS codes that best reflect the complete range of cybersecurity offerings your business provides is key for proper industry classification and opportunities.
As a relatively new field, utilizing a mix of existing codes is currently necessary, but new cybersecurity-specific codes are on the horizon.
FAQs
Q: What is the main NAICS code for cybersecurity?
A: There is no single universally-used NAICS code dedicated specifically to cybersecurity yet. A mix of codes like 541511, 541512, and 541611 are commonly used as base codes.
Q: Who issues and manages NAICS codes?
A: NAICS codes are jointly managed by the statistics agencies of the US, Canada, and Mexico. New codes are added based on emerging business sectors and economic changes.
Q: Do NAICS codes expire?
A: No, NAICS codes do not strictly expire. However, the classification system gets updated every 5 years, which may result in some code changes, mergers, or new codes being introduced.
Q: Can my business use multiple NAICS codes?
A: Yes, it is common for modern businesses in emerging fields like cybersecurity to utilize a mix of 2 to 6-digit NAICS codes to adequately capture the full range of offerings provided.
Q: How do NAICS codes help cybersecurity businesses?
A: Accurate NAICS classification helps in government contracting, proper industry analysis for business decisions, pursuing targeted incentives and opportunities and tracking the impact of policy changes.
