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Differences between government and business budget making

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What are some of the differences that are apparent between government and business budget making? Are there any similarities in their profit motives?

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Your tutorial is 386 words plus two references. Differences in budgets and profit motives are mentioned along with explanations of why the differences occur. Thank you for asking BrainMass.

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Governments are taxing authorities and so they are not vulnerable to laws of supply and demand and market competition. So, when budgeting revenues, governments must forecast activity that is taxable. Businesses, however, decide what product to offer, what promotions to initiate, and then forecast the likely market response in terms of sales to their actions and the likely actions of competitive products or prices.
Governments have mandatory spending. That is, they have laws that require them to spend for certain programs, such as military, social security, welfare program and so forth. Businesses have very few "mandatory costs." Businesses do have payroll taxes, sales taxes, income taxes and some mandatory ...

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Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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