Selecting the right business categories for your company might seem like a simple task, but it’s actually a well-thought-out decision with far-reaching implications. The categories you choose affect everything from how customers find you to how government agencies classify your business. This article will guide you through the complex world of business categorization, helping you make informed decisions that align with industry standards while maximizing your visibility.

Whether you’re registering a new business, listing your company in directories, or optimizing your online presence, understanding the nuances of business categories will give you a competitive edge. Let’s explore how to navigate classification systems, research relevant keywords, and implement category strategies that work across multiple platforms and locations.

Introduction: Understanding NAICS vs. SIC Codes

Before diving into category selection strategies, it’s key to understand the two primary classification systems used in North America: NAICS (North American Industry Classification System) and SIC (Standard Industrial Classification) codes. These standardized systems provide the foundation for how businesses are categorized by government agencies, researchers, and many business directories.

NAICS codes were introduced in 1997 to replace the older SIC system, offering a more detailed and updated classification framework. While SIC codes use a 4-digit structure, NAICS employs a 6-digit hierarchical coding system that provides greater specificity and better accommodates modern industries, particularly in service and technology sectors.

Let’s compare these classification systems:

Understanding these classification systems matters because they often form the backbone of category structures in business directories, government databases, and industry reports. When selecting categories for your business, you might not directly choose NAICS or SIC codes, but the categories available to you are frequently derived from these systems.

For example, if you run a digital marketing agency specializing in social media, your NAICS code would be 541820 (Public Relations Agencies) or 541613 (Marketing Consulting Services). Knowing this helps you select appropriate categories when listing your business in directories or on platforms that might use variations of these classifications.

The hierarchical nature of NAICS codes is particularly useful for understanding category relationships. Let’s break down how a code works:

• First 2 digits: Economic sector (e.g., 54 = Professional, Scientific, and Technical Services)
• Digits 3-4: Industry subsector and group
• Digits 5-6: Specific industry

This structure helps you understand how specific categories relate to broader industry groupings, which becomes valuable when making category selections that balance specificity with reach.

Keyword Research for Categories

Moving beyond formal classification systems, effective category selection requires understanding how your potential customers search for businesses like yours. This is where keyword research becomes highly beneficial—it bridges the gap between official classifications and actual consumer search behavior.

Start by identifying the terms your target audience uses when looking for your products or services. These might differ significantly from the formal language used in NAICS descriptions. For instance, while your business might fall under “Computer Systems Design Services” (NAICS 541512), your customers might search for “IT support,” “tech help,” or “computer repair near me.

Here’s a practical approach to keyword research for category selection:

1. List your primary products/services and what problems they solve
2. Brainstorm how customers might describe these offerings
3. Use keyword research tools to identify search volume and competition
4. Analyze competitors’ category selections across platforms
5. Map these keywords to available categories on your target platforms

Several tools can assist with this research:

• Google Keyword Planner: Provides search volume data and related terms
• SEMrush or Ahrefs: Offers competitor analysis and keyword difficulty metrics
• Google Trends: Shows how category-related searches change over time
• Answer the Public: Reveals questions people ask about your industry

When examining keywords, pay special attention to local modifiers. If you’re a brick-and-mortar business, categories that include location-specific terms (“bakery in Chicago” rather than just “bakery”) might be particularly valuable for local SEO purposes.

It’s also important to understand how keywords map to available categories on different platforms. For example, Google Business Profile offers a limited set of categories, while Business Directory provides more specialized categories for certain industries. Your keyword research should help you identify which platform-specific categories best match your target keywords.

Create a matrix that maps your target keywords to available categories across different platforms. This visual representation helps identify gaps or misalignments in your category strategy. For example:

This matrix approach reveals opportunities to cover more search intent through deliberate category selection. In some cases, you might need to prioritize certain categories over others if platforms limit how many you can select.

Primary vs. Secondary Classifications

Most business listing platforms allow you to select multiple categories, but they typically distinguish between primary and secondary classifications. This distinction is vital—your primary category carries more weight for search algorithms and often determines how your business appears in category-specific searches.

Your primary category should represent your core business function—what you primarily want to be known for and what generates most of your revenue. Secondary categories should capture additional services or specialties that might attract specific customer segments.

Let’s examine how to approach primary vs. secondary classifications across different scenarios:

For Multi-Service Businesses

If you offer multiple distinct services, your primary category should reflect your core competency or the service that drives most of your business. For example, a spa that also sells skincare products would likely choose “Day Spa” as the primary category and “Beauty Supply Store” as a secondary category.

The selection process should consider:

• Revenue distribution across services
• Well-thought-out growth areas
• Market in each category
• Search volume and competition for category-related keywords

For Seasonal Businesses

Some businesses experience seasonal shifts in their service focus. For instance, a landscaping company might focus on lawn care in summer and snow removal in winter. In such cases, consider:

1. Using your year-round or highest-revenue service as your primary category
2. Adding seasonal services as secondary categories
3. Updating your primary category temporarily during peak seasons if a particular service dominates

Just remember that frequently changing your primary category can impact your search ranking consistency, so this approach requires careful consideration.

Balancing Specificity and Reach

One of the key tensions in category selection is balancing specificity with reach. More specific categories (e.g., “Vegan Italian Restaurant” rather than just “Restaurant”) can increase relevance for niche searches but might limit your visibility for broader queries.

A planned approach is to use your primary category for optimal specificity—the most precise classification that accurately describes your core business—while using secondary categories to capture broader related searches.

Some platforms weigh primary categories much more heavily than secondary ones. For example, on Google Business Profile, your primary category significantly influences when your business appears in category searches, while secondary categories have a more subtle impact. Understanding these platform-specific weightings should inform your selection strategy.

Industry-Specific Category Mapping

Different industries face unique challenges and opportunities when it comes to category selection. Let’s explore industry-specific considerations that can help you refine your approach.

Retail and E-commerce

Retail businesses often struggle with category selection because products might span multiple categories. A store selling outdoor gear could potentially fit under sporting goods, clothing, or recreational equipment categories.

Good techniques for retail category mapping include:

• Focusing on your highest-margin or signature product lines for primary categorization
• Using secondary categories to capture specific product categories
• Considering seasonal shifts in product focus
• Mapping categories to customer problems rather than just product types

For e-commerce businesses, category selection should align with your SEO strategy. If you’re targeting specific product keywords, your categories should reflect those focus areas.

Professional Services

Service-based businesses face the challenge of communicating specialized ability through categories. For example, a law firm might practice in several areas but want to be known for specific specialties.

For professional services, consider:

• Using your highest-value service area as your primary category
• Selecting secondary categories that reflect complementary services
• Including categories that address specific client problems
• Balancing technical industry terms with layperson language

Hospitality and Food Service

Restaurants and hospitality businesses benefit from highly specific primary categories. Rather than just “Restaurant,” use “Italian Restaurant,” “Vegan Café,” or “Fine Dining Restaurant” to immediately signal your specialty to both search algorithms and potential customers.

Consider these factors when mapping categories for food service businesses:

• Cuisine specialization
• Price point and dining experience
• Signature dishes or offerings
• Service model (fast casual, fine dining, takeout-focused)

Healthcare and Wellness

Medical and wellness businesses must be particularly careful with category selection to ensure compliance with regulations while accurately representing their services. For example, a wellness center offering massage therapy, acupuncture, and nutritional counseling would need to select categories that clearly delineate these services without making medical claims beyond their scope of practice.

Healthcare category mapping should consider:

• Regulatory requirements and scope of practice
• Insurance billing categories
• Patient search behavior (which often uses symptom-based language)
• Specializations and certifications

Technology and SaaS

Technology companies often face the challenge of fitting new services into traditional category structures. Many directories and platforms haven’t fully caught up with the nuances of modern tech businesses.

For technology companies, consider:

• Focusing on the problem you solve rather than your technology
• Using industry-specific categories when available
• Selecting categories based on your target customer’s industry
• Balancing technical accuracy with customer-friendly language

Competitive Category Analysis

Understanding how your competitors position themselves through category selection provides valuable insights for your own strategy. Competitive category analysis helps you identify opportunities for differentiation, recognize industry norms, and potentially discover underserved category niches.

Start by identifying your top 5-10 competitors across different platforms. Note their primary and secondary categories, and look for patterns and outliers. This analysis can reveal:

• Industry consensus on category selection
• Unique positioning strategies
• Potential category gaps or opportunities
• Platform-specific category strategies

Here’s a systematic approach to competitive category analysis:

1. Identify direct competitors in your local market or niche
2. Document their category selections across platforms (Google, Yelp, directories, etc.)
3. Note which competitors rank well for valuable search terms
4. Analyze whether top-ranking competitors share common category patterns
5. Look for underutilized categories that might offer less competition

When analyzing competitor categories, look beyond just the category names to understand the planned intent behind their selections. For example, a competitor might choose a broader category to capture more searches, while another might select a niche category to emphasize specialization.

Consider creating a competitive category matrix like this:

This analysis might reveal that while most competitors position themselves as general financial advisors, there’s an opportunity to stand out by emphasizing a specific aspect of financial services as your primary category.

Also consider how competitors’ category selections might vary by platform. A competitor might use different primary categories on Google versus industry-specific directories, tailoring their approach to each platform’s audience and category structure.

Local SEO Category Optimization

For businesses serving local markets, category selection plays a necessary role in local search engine optimization. Local SEO category optimization focuses on aligning your categories with local search patterns and ensuring consistency across platforms.

Google Business Profile (formerly Google My Business) is particularly important for local category optimization, as it directly influences how your business appears in Google Maps and local search results. Google offers over 4,000 business categories, but you can only select up to 10, with one primary category.

Here are key strategies for local SEO category optimization:

Local Keyword Research

Local category optimization starts with understanding how people in your area search for businesses like yours. Local search patterns can differ significantly from national trends.

• Use Google Trends with location filters to identify regional search preferences
• Analyze “near me” searches related to your business type
• Research location-specific modifiers (e.g., “Chicago accountant” vs. just “accountant”)
• Consider seasonal variations in local search behavior

Platform-Specific Category Strategies

Different local platforms have different category structures and limitations. Your strategy should adapt to each while maintaining core consistency.

• Google Business Profile: Select the most specific primary category that accurately describes your business, then add secondary categories for additional services
• Yelp: You can select up to 3 categories, so prioritize those most relevant to your core business
• Facebook: Offers category options that sometimes differ from Google’s, requiring careful mapping
• Local directories: Often have their own category structures that may align with NAICS or use custom taxonomies

Location-Specific Category Considerations

Category selection might need to vary based on local market conditions:

• In competitive markets, more specific niche categories might help you stand out
• In smaller markets, broader categories might be necessary for visibility
• Consider local terminology differences (e.g., “sub sandwich” vs. “hoagie” vs. “grinder”)
• Adjust for regional service variations or specialties

Category Consistency Across Local Citations

While your categories might vary slightly across platforms due to different category structures, maintain core consistency in how your business is classified. Major discrepancies can confuse search engines and customers alike.

Create a local citation category map to ensure consistency:

Monitoring Category Performance

Category optimization isn’t a one-time task—it requires ongoing monitoring and adjustment:

• Track which search terms are driving traffic to your Google Business Profile
• Monitor changes in local search rankings after category adjustments
• Analyze competitor category changes and their impact
• Review category performance across different platforms

If you notice declining performance for important local searches, consider whether category adjustments might help realign your business with current search patterns.

Multi-Location Category Consistency

For businesses with multiple locations, category selection presents additional challenges. You need to balance brand consistency across locations while accounting for local variations in services, competition, and search behavior.

The core question becomes: Should all your locations use identical categories, or should you tailor categories to each location’s specific offerings and market conditions?

When to Maintain Consistent Categories

Category consistency across locations makes sense when:

• All locations offer identical core services
• Brand identity is strongly tied to a specific business category
• You want to reinforce a consistent brand message
• Your marketing emphasizes standardized offerings across locations

When to Vary Categories by Location

Location-specific category strategies are appropriate when:

• Different locations offer substantially different services
• Local market competition varies significantly by location
• Regional terminology or search patterns differ
• Certain locations have unique specializations or equipment

For example, a restaurant chain might use different primary categories for locations with different formats—”Fast Food Restaurant” for express locations and “Casual Dining Restaurant” for full-service locations.

Managing Multi-Location Categories

Here’s a planned approach to multi-location category management:

1. Create a category governance framework that defines which aspects of categorization should be consistent and which can vary
2. Develop a central category database that maps approved categories to location types
3. Establish a process for location managers to request category variations with justification
4. Regularly audit category selections across locations to ensure match with brand standards
5. Monitor performance metrics by category across locations to identify successful patterns

This balanced approach allows for necessary local variations while preventing category chaos that could dilute your brand identity.

Franchise Category Considerations

Franchised businesses face particular challenges with category consistency. Franchisors typically want to maintain brand consistency, while franchisees may want to emphasize local specialties or services.

Successful approaches for franchise category management include:

• Providing franchisees with approved primary and secondary category lists
• Creating category selection guidelines that allow limited customization
• Developing a category approval process for non-standard selections
• Offering market-specific category recommendations based on performance data

Multi-Location Category Audit Process

Regular category audits help maintain appropriate consistency across locations. A comprehensive audit should:

1. Document current category selections across all locations and platforms
2. Identify inconsistencies and evaluate whether they’re justified
3. Compare category performance metrics across similar locations
4. Check for harmony with current service offerings at each location
5. Verify compliance with brand guidelines and franchise agreements

This process helps identify both problematic inconsistencies and successful local variations that might be worth implementing more broadly.

Conclusion: Future Directions

As we look ahead, business category selection continues to evolve alongside changes in search technology, consumer behavior, and platform capabilities. Understanding these trends helps you develop a forward-looking category strategy that remains effective as the sector changes.

Emerging Trends in Business Categorization

Several developments are shaping the future of business categories:

• AI-Driven Categorization: Platforms increasingly use artificial intelligence to understand business attributes beyond explicit category selections, making your overall online presence more important for category relevance
• Voice Search Optimization: Categories that align with natural language queries are gaining importance as voice search continues to grow
• Hyper-Local Categories: More minute geographic categorization allows businesses to target specific neighborhoods or micro-markets
• Intent-Based Categories: Categories based on customer intent rather than business type are becoming more common
• Dynamic Categorization: Some platforms are exploring time-based category relevance that changes based on business hours or seasonal offerings

Preparing for Category Evolution

To stay ahead of categorization changes, consider these forward-looking strategies:

1. Monitor changes in platform category options and adjust promptly when new, more relevant categories become available
2. Track how customers discover your business and adapt categories to align with changing search patterns
3. Develop a comprehensive business attribute database that goes beyond simple categories
4. Experiment with different category combinations and measure their impact
5. Stay informed about changes to classification systems like NAICS, which influence many category structures

Final Recommendations

As you implement your category selection strategy, keep these core principles in mind:

• Accuracy First: Always choose categories that genuinely reflect your business
• Customer Perspective: Select categories based on how customers search, not just industry terminology
• Planned Specificity: Use your primary category for precise positioning and secondary categories for broader reach
• Consistent Core Identity: Maintain consistency in how you categorize your fundamental business type across platforms
• Regular Review: Reassess your categories quarterly as your business, platforms, and search patterns evolve

By approaching category selection as an ongoing deliberate process rather than a one-time setup task, you’ll maintain optimal visibility as platforms and search behaviors continue to evolve.

By implementing these effective methods for business category selection, you’ll improve your visibility to the right audiences, align with industry standards, and position your business effectively in an increasingly digital marketplace. Remember that category selection is not just an administrative task—it’s a intentional marketing decision that influences how customers find and perceive your business.