Business and Revenue in Georgia

1. Business and Revenue in Georgia March 30, 2015 Standard: SS8E3 The student will evaluate the influence of Georgia’s economic growth and development.

2. 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.

3. 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

4. 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

5. Standard: SS8E3 • Evaluate the importance of entrepreneurs in Georgia who developed such enterprises as Coca-Cola, Delta Airlines, Georgia-Pacific, and Home Depot.

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. Standard: SS8E4The student will identify revenue sources & services provided by state & local governments. • Trace sources of state revenue such as sales taxes, federal grants, personal income taxes, and property taxes.

18. 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

19. 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

20. 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

21. 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

22. Standard: SS8E4The student will identify revenue sources & services provided by state & local governments. • Explain the distribution of state revenue to provide services.

23. 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

24. 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

25. 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? Questions…

26. 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? More Questions…