Business and Revenue in Georgia

March 30, 2015Standard: SS8E3The student will evaluate the influence of Georgia’s economic growth and development.

Standard: SS8E3

a. Define profit and describe how profit is an incentive for entrepreneurs.

b. Explain how entrepreneurs take risks to develop new goods and services to start a business.

Entrepreneurs

Georgia is home to many entrepreneurs who have developed many nationally known businesses An entrepreneur is a person in a market

economy who takes a risk and opens a business

They are willing to risk their limited resources to produce these goods and services in hopes of earning a profit Profit is the amount left after all production

costs have been subtracted Many businesses suffer losses and can fail, so this

is a very risky thing for an entrepreneur to do because they can lose their money

Entrepreneurs in Georgia

Georgia entrepreneurs include: John Pemberton, Asa Candler, and Robert

Woodruff: Coca-Cola C.E. Woolman: Delta Airlines Owen Cheatham: Georgia-Pacific Bernie Marcus and Arthur Blank: Home Depot Ted Turner: CNN Alonzo Herndon: Atlanta Life Insurance Truett Cathy: Chick-fil-A

Standard: SS8E3

c. Evaluate the importance of entrepreneurs

in Georgia who developed such enterprises as Coca-Cola, Delta Airlines, Georgia-Pacific, and Home Depot.

Coca-Cola Beginnings

First developed in the mid-1800s by “Doc” John Pemberton, Coca-Cola was originally called French Wine Cola and contained a high amount of alcohol

When the temperance movement swept through Georgia, Doc Pemberton changed the formula to remove the alcohol and named it after its’ two main ingredients – the coca plant and the kola nut

It was a syrup, when mixed with water, that was used to treat headaches and sold for 25 cents a bottle

Coca-Cola Grows

One day, a customer at a drugstore bought some syrup and asked to have it mixed up with water in the store so he could drink it right away

The pharmacy worker mixed it with soda water instead of tap water and the customer liked it better

Within weeks, other drugstores began mixing it that way and production grew to over 1000 gallons a year

Asa Candler

In the late 1800s, Asa Candler, a pharmacist, bought Coca-Cola’s stock from Pemberton

In 1892, Candler formed the Coca-Cola company, which gained him much wealth because of the popularity of the drink

In 1919, Candler sold the company to Ernest Woodruff for $25 million

Robert Woodruff

In 1923, Robert, Ernest Woodruff’s son, became president of the company

He turned the company into a multi-billion dollar business with clever marketing and advertisements

In WWII, he built bottling plants in Europe to give American soldiers a taste of home while at war

Europeans also began drinking Coca-Cola and its popularity spread around the world

Today, Coca-Cola products are enjoyed by over 470 million people worldwide every day

Delta Airlines Beginnings

In 1924, a crop dusting company, Huff Daland Dusters, was formed in Macon by C.E. Woolman

In 1925, its headquarters was moved to Monroe, LA where a group of businessmen bought it and renamed it Delta Air Service

It continued its crop dusting service but also bought 5 passenger planes and began carrying passengers in 1929 between Dallas, TX and Jackson, MS

In 1934, it started a mail route to Atlanta, and moved its headquarters to Atlanta in 1941

Delta Grows

During WWII, Delta contributed to the war effort by training pilots and modifying some of its planes for use by the military

In 1945, the name changed to Delta Air Lines

In 1953, it merged with Chicago and Southern Airlines, then Northeast Airlines in 1972 and Western Airlines in 1987

It expanded its routes and in the 1990s, added international flights

Delta Today

Today, Delta has contributed to the growth of Atlanta by offering a wide range of flight options to business flyers and vacation flyers

It merged with Northwest Airlines in 2008 to form one of the largest airlines in the U.S.

It offers service to more destinations than any other global airline

Georgia-Pacific Beginnings

Founded in 1927 by Owen Cheatham as the Georgia Hardwood Lumber Co. in Augusta, GA

Over the years, the company expanded and changed its name to Georgia-Pacific in 1956

It moved its headquarters for a while to Portland, OR, but moved to Atlanta in 1982

Georgia-Pacific Today

Today, it manufactures a number of familiar products to consumers – Brawny, Dixie cups, and Quilted Northern

It employs about 50,000 people around the world and has several facilities in Georgia

Home Depot Beginnings

The first Home Depot stores were opened by Bernie Marcus and Arthur Blank in Atlanta in 1979

Within the first 5 years, stores opened in Florida, Louisiana, Texas, and Alabama

Stores originally stocked about 25,000 products

Home Depot Today

Today, the stores stock about 40,000 products and have 2000 stores around North America and China

Marcus and Blank, though retired from Home Depot, continue to be active in the Atlanta area

Both provide financial support to many charities, Blank owns the Falcons, and Marcus donated $200 million to build the Georgia Aquarium

Standard: SS8E4The student will identify revenue sources & services provided by state & local governments.

a. Trace sources of state revenue such as sales

taxes, federal grants, personal income taxes, and property taxes.

State Government Revenue

All of these businesses create revenues (income) for Georgia by charging sales tax on their products and paying income tax on their profits

Taxes are the major source of revenue for the state, but federal funds and special fees also provide revenue

Where do revenues come from?

About 90% of Georgia’s revenue comes from taxes (personal income tax, sales tax, gas tax, cigarette and alcohol tax, property tax)

Federal funds come from the U.S. government and special fees come from different state agencies

Expenditures and the Budget

Each year, a plan for spending the revenues (expenditures) is created

An original budget is passed by the General Assembly during their yearly session to cover a fiscal year (a budgetary spending year)

An amended budget is often needed later in the fiscal year to keep the budget balanced

Sometimes, a supplementary budget is used to change the original budget when new spending is needed or extra funds are available

Local Government Revenue

Local governments also collect most of their revenues from taxes

Property taxes, sales taxes, and cigarette and alcohol taxes contribute

Fees such as business licenses and car tags also contribute

Standard: SS8E4The student will identify revenue sources & services provided by state & local governments.

b. Explain the distribution of state revenue

to provide services.

Distribution of Revenues

The state and local governments provide services to the citizens paid for with the revenues

At the state level, the largest expenditure is for education Other expenditures include salary for

government employees, public safety, and transportation

Local governments also make expenditures for education, plus police and fire protection, libraries, water service, and parks

Scarcity

All governments face issues of scarcity (when our needs are unlimited and revenues are limited)

Lawmakers often have to choose which services they can provide with limited revenues

In times like this, the most essential expenditures are essential services to the citizens like education and health services

Questions…

1) What is an entrepreneur? 2) What is profit? 3) Why is being an entrepreneur risky? 4) Who developed the original Coca-Cola syrup? 5) What is Coca-Cola named after? 6) Who formed the Coca-Cola Company in 1892? 7) How did Robert Woodruff turn Coca-Cola into a multi-billion

dollar company? 8) Where and how did Delta Airlines start?

9) When did Delta’s headquarters move to Atlanta? 10) How did Delta contribute to the WWII effort? 11) When did Delta add international flights? 12) How did Delta contribute to the growth of Atlanta? 13) How did Georgia-Pacific start? 14) What products does Georgia-Pacific make? 15) Who opened the first Home Depot stores? 16) How do Marcus and Blank contribute to the city of Atlanta?

More Questions…

17) What is revenue? 18) What is the major source of state revenue? 19) What are other sources of state revenue? 20) What are expenditures? 21) What is a fiscal year? 22) What are 3 types of budgets and what are they for? 23) Where do local governments get their revenues? 24) What is the largest expenditure at the state level?

25) What do local governments make expenditures for? 26) What is scarcity? 27) What are the essential expenditures in times of scarcity?