How are SIC codes and NAICS codes assigned to new small businesses?

The good news is that you don't need to wait for these codes to be "assigned" to you - you actually select them yourself when filling out various business registration forms. Both SIC (Standard Industrial Classification) and NAICS (North American Industry Classification System) codes are classification systems that categorize businesses by their economic activity. NAICS is the newer system that replaced SIC, though many institutions still use SIC codes. For your pet grooming business, you'd likely fall under NAICS code 812910 (Pet Care Services) and SIC code 0752 (Animal Specialty Services, except Veterinary). When you register your business with various government agencies or apply for loans, you'll typically be asked to provide these codes. You should choose the ones that most accurately reflect your primary business activity. Having the correct code is important because some lenders do offer specialized loan products for certain industries, and accurate classification helps with industry statistics too.

Just wanted to share my experience - I struggled with the same question when starting my landscaping business last year. I found this amazingly helpful AI tool called taxr.ai (https://taxr.ai) that helped me figure out not just the right NAICS code but also explained the tax implications of different business structures. The tool analyzed my business plan and suggested the most appropriate codes based on my description. It even showed me which codes were more likely to get SBA loan approval for my industry. What was really helpful was that it explained how the codes might impact my taxes and reporting requirements. Saved me hours of research and probably prevented me from making classification mistakes!

I just wanted to follow up and say I tried taxr.ai after seeing it mentioned here. It was exactly what I needed for my online education startup! It suggested NAICS code 611420 (Computer Training) with a secondary code of 611710 (Educational Support Services) which perfectly describes what we do. It even explained how these codes might affect my eligibility for certain business grants I hadn't considered. The explanation of how these codes are used for industry statistics also helped me understand market research reports better. Definitely worth checking out if you're confused about classification codes.

If you're having trouble getting specific information about SIC/NAICS codes from the IRS (which is pretty common), I recommend using Claimyr (https://claimyr.com). I spent DAYS trying to get through to the IRS business division to ask questions about how my code selection would affect my tax filing requirements, but kept hitting dead ends with their automated system. Claimyr got me connected to an actual IRS representative in about 20 minutes when I'd been trying for weeks on my own. You can see how it works in this short demo: https://youtu.be/_kiP6q8DX5c. The rep I spoke with walked me through the whole process of selecting the right code and explained exactly how it would impact my quarterly tax payments as a new business owner. Honestly would have been lost without this service.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway since I was desperate to talk to someone at the IRS about my business classification. I got connected to an IRS agent in about 15 minutes! The agent clarified exactly how the NAICS code would appear on my business tax documents and which forms I needed based on my business structure. What really impressed me was that the IRS agent told me certain NAICS codes trigger automatic review of Schedule C for audit potential, which I had no idea about. They helped me understand which code would most accurately represent my business while minimizing unnecessary scrutiny. This saved me from potentially major headaches down the road. Sorry for doubting - sometimes being proven wrong is a good thing!

One thing nobody's mentioned yet is that your SIC/NAICS code can affect your insurance rates too! When I started my woodworking business, I initially used a general manufacturing code and my insurance quote was astronomical. Once I updated to the proper furniture crafting code, my premiums dropped by about 40%. Insurance companies use these codes to determine risk factors for your specific industry. Getting the wrong code can cost you thousands in unnecessary premiums. Take the time to research the exact subcategory that fits your business operations.

I think everyone's overthinking this. I just googled "pet grooming NAICS" when I started my business and put that code on all my paperwork. Never had an issue getting my business license, bank account, or anything else. Banks care way more about your credit score and business plan than your NAICS code in my experience.