Conducting Industry Research

As you develop your business plan, you will need to learn more about the industry in which you want to open your business. An industry refers to a group of establishments (businesses) that produce similar products and services.

Knowing your industry helps you identify industry trends and understand your competition. Begin your investigation with broad resources such as industry overviews and forecasts, then refine your analysis with articles, market research, association data and current statistics.

Keep in mind the fact that equal amounts of information are not available for all industries. It can vary widely by industry depending on the size, age, and rate of technological change within an industry.

Use the following steps to find information about the industry you selected:

Step 1: Identify Your Industry

Step 2: Industry Overviews

Step 3: Find Articles About Your Industry

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Step 1: Identify Your Industry

It is important early in the research process to identify industry classification codes for your chosen industry because information about companies and industries is organized around those codes. Business information is published using North American Industry Classification System (NAICS) codes and/or Standard Industrial Classification (SIC) codes.

The SIC System groups businesses by the type of activity, whereas NAICS groups businesses according to similar production proc-esses. These codes will assist you in finding major establishments in your industry field, where they are located, and what the trends are for that industry.

These codes also make it easy to locate and compare data about your industry. You will most likely need both sets of codes. Al-though government data has been using NAICS since 1997, some publishers of business information still use SIC codes.

Find your industry's NAICS code

Find your industry's SIC code

NOTE: Establishments can operate in more than one category, especially when they provide a variety of goods and services. You may find a primary code with a number of secondary codes in connection with one business.

You may also see discrepancies among primary and secondary codes, depending on the publisher. A SIC or NAICS code that an establishment might choose, or otherwise appear on an economic census form, may be entirely different from what a publisher of business information may have selected to identify that business.

Industry Research

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North American Industry Classification System (NAICS)

How do I find a NAICS Code?

You can locate a NAICS code online or by using the print North American Industry Classification System manual available at the Metro Campus Library. Use the alphabetic index of the print version to locate your industry, or look up your industry keyword using the online search function.

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Industry Research

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North American Industry Classification System (NAICS)

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Industry Research

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North American Industry Classification System (NAICS)

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Be sure to write down the 2007, 2002, 1997 NAICS codes you find. You will use these in Step 2 to search online databases or to access print materials. If you haven't already, continue on to find your SIC code.

Learn more about NAICS here.

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More About NAICS

What is a NAICS Code?

On April 9, 1997, the North American Industry Classification System (NAICS) became the new standard to describe business establishments and industries, replacing the SIC codes. This new system is being used by the United States, Mexican, and Canadian governments to collect and distribute statistical informa-tion.

However, keep in mind that both the SIC and NAICS systems are being used by commercial publishers while the NAICS codes are slowly integrated. Be-cause not all commercial publishers have converted SIC codes into NAICS codes, you may need to locate both identifiers for cross-referencing.

To further confuse matters, the NAICS are revised every 5 years in preparation for the economic census. You will need to see if your NAICS code has re-mained the same since the 1997 or has experienced changes. If there have been changes, you may need to conduct searches on the older NAICS codes. There are tables converting the 1987 SIC codes to the 1997, 2002 and 2007 NAICS codes.

How do I read a NAICS Code?

Because the NAICS codes have a hierarchical level of six digits, it can be fairly specific about individual industries. For example, if you are interested in com-panies that manufacture detergents and want to know something about the trends and size of the industry, the first step in your information gathering is to find the NAICS code for the detergent manufacturing industry. Looking up “detergent” or “soap” in the index directs you to the same NAICS number.

The six-digit code for the Soap and Other Detergent Manufacturing industry is interpreted as follows:

32 Sector (Manufacturing) 325 Subsector (Chemical Manufacturing) 3256 Industry Group (Soap, Cleaning Compound, and Toilet Preparation Manufacturing) 32561 NAICS Industry (Soap and Cleaning Compound Manufacturing) 325611 Industry (Soap and Other Detergent Manufacturing)

Find NAICS codes here.

Industry Research

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Standard Industrial Classification (SIC) System

How do I find a SIC Code?

You can locate a SIC code online or by using the Standard Industrial Classification Manual available at the Metro Campus Li-brary. Use the alphabetic index of the print version to locate your industry, or look up your industry keyword using the online search function.

For more consistent results, however, use the 1997 NAICS bridge to the 1987 SIC codes.

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Industry Research

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Standard Industrial Classification (SIC) System

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Industry Research

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Standard Industrial Classification (SIC) System

Be sure to write down the SIC code you find. You may need to use it in Step 2 to search online databases or to access print ma-terials. If you haven't already, continue on to find your NAICS code.

You can learn more about SIC codes here.

Industry Research

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More About SIC codes

What is a SIC code?

The Standard Industrial Classification (SIC) System was established by the U.S. government in the late 1930's to provide a uniform method for collecting, presenting, and analyzing economic information. SIC codes were used by government agencies; trade asso-ciations, private research organizations and business professionals when presenting industry statistical data.

SIC codes were retired after the 1992 economic census and replaced by the NAICS codes in the 1997 economic census. Knowing that the SIC codes were going to be replaced after the 1992 census, the SIC codes have not been revised since their 1987 itera-tion, which is the most current version in use.

How do I read a SIC Code?

If you are interested in a career in designing greeting cards and want to know something about the size of the greeting card indus-try and the career potential, the first step in your information gathering is to find the SIC code for the greeting card industry.

The four-digit hierarchical SIC code for the greeting card industry is interpreted as follows:

27 Major Group Number (Printing, Publishing and Allied Industries) 277 Industry Group Number (Greeting Cards) 2771 SIC Code (Greeting Cards: publishing or printing of greeting cards for all occasions--excluding hand-painted cards)

Find SIC codes here.

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Step 2: Find Industry Overviews

Now that you have found the SIC code and NAICS code for your industry, use them to track down industry reports and articles in online research databases and encyclopedias.

Industry profiles provide an overview of an industry -- products/services available, some history, size of the industry, and outlook for the next few years. They also report on current conditions, trends and projections.

Use Business Source Complete [on-campus | off-campus], a library research database, to locate industry overviews. If you are ac-cessing databases from a location other than a Tri-C campus, use the "off-campus" link. (Click on the following image to enlarge it.)

You should also try the following online encyclopedias provided by Tri-C Library. Search with either the SIC or NAICS code:

Encyclopedia of American Industries

Encyclopedia of Emerging Industries

Encyclopedia of Global Industries

Other business databases to which Tri-C library subscribes are located on our Business subject guide.

Continue on to Step 3 to find articles about your industry.

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Step 3: Find Articles about Your Industry

Articles published in business magazines, trade journals and newspapers often provide added-depth and insight into an industry’s structure, strategy and competition.

Use Business Source Complete [on-campus | off-campus], a library research database, to locate articles. If you are accessing databases from a location other than a Tri-C campus, use the "off-campus" link. (Click on the image to enlarge it.)

You may also want to try Regional Business News [on-campus | off-campus]. Other data-bases with business articles are located on our Business subject guide.

Still need more? Try your public library!

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Using Your Public Library

If you are still in need of industry information, grab your Greater Access Card and use the online business databases at Cleveland Public Library (CPL) and Cuyahoga County Public Library (CCPL). (Be sure to first validate your Greater Access Library Card at both libraries!)

Try the Business & Company Resource Center at CPL. It contains extensive essays for 1,115 industrial categories, 7,000 tables and charts, 3,600 market share reports and 120,000 company rankings.

Also try Standard & Poor's NetAdvantage at CCPL. It has industry information, including Standard & Poor's Stock Reports, Indus-try Surveys, The Outlook, Corporation Records and other products.

Industry Research

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Economic Census

Most people are not aware that the U.S. government conducts an economic census in addition to the more commonly-known population census. The economic census provides a detailed portrait of the nation's economy once every 5 years from the na-tional to the local level. Unlike the population census, the economic census is mandated by law, and requires establishments to respond. There are penalties for firms that fail to report.

The most current census, the 2007 economic census, measures activity during calendar year 2007. Census forms were mailed to more than 4 million companies in December 2007, with a due date of February 12, 2008. There were over 500 versions of the census form, each customized to particular industries. Some very small companies did not receive a census form.

Results from the 2007 census are just now being released on the Internet. Therefore, the 2002 economic census is the most com-plete set available. The remainder of the 2007 data and reports will be available by 2011.

For more information on the economic census, visit the Guides to the 1997, 2002 and 2007 Economic Census produced by the U.S. Census Bureau.

Industry Research

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Bridges between NAICS and SIC

1987 SIC to 1997 NAICS http://www.census.gov/epcd/ec97brdg/

1997 NAICS to 2002 NAICS http://www.census.gov/econ/census02/data/bridge/

Bridge between 2007, 2002 and 1997 NAICS http://www.census.gov/eos/www/naics/index.html

Industry Research

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