Running a bakery could be fun for bakers, it is not so fun to deal with the business side of things. One particular thing that is quite confusing to me initially when I helped my wife prepare the sales tax and franchise tax for her home bakery is the NAICS code.
The NAICS stands for North American Industry Classification System. It is used classify the type of business you are in. If you search the internet, many baker forum discussed it and no definitive answer based on your situation are given. If you are also baffled about the same question that I had before. I am here to help you figure it out with a few questions.
Figure out your NAICS code with a few questions
Q1. Do you sell to the end customers?
If your answer is YES, you are considered as a retailer, go to Q2.
If your answer is NO, you are considered as a manufacturer, go to Q4.
Q2. Are your customers consuming the goods in your store?
If your answer is YES, your NAICS code is 722515 (Snack and Nonalcoholic Beverage Bars).
If your answer is NO, go to Q3.
Q3. Do you make the goods in your store?
If your answer is YES, your NAICS code is 311811 (Retail Bakeries).
If your answer is NO, your NAICS code is 445291 (Baked Goods Stores).
Q4. Do you primarily making cookies, crackers of hard pretzels?
If your answer is YES, go to Q5.
If your answer is NO, go to Q6.
Q5. Do you primarily hard pretzels?
If your answer is YES, your NAICS code is 311919 (Other Snack Food Manufacturing).
If your answer is NO, your NAICS code is 311821 (Cookie and Cracker Manufacturing).
Q6. Do you primarily making frozen cake, pies, etc (except bread)?
If your answer is YES, your NAICS code is 311813 (Frozen Cakes, Pies, and Other Pastries Manufacturing).
If your answer is NO, your NAICS code is 311812 (Commercial Bakeries).
By now, you should have got your NAICS code from the questions above. The most common case should be 311811 and 311812. The best source is go directly to the NAICS official website: https://www.census.gov/eos/www/naics/index.html
If you still have difficulty figuring out the right code for your business, leave a comment below and we would love to help out.