5 ingredients to thrive

With one of the highest failure rates in business, restaurants are under constant pressure to draw in new customers and run more efficiently.

About 60 percent of restaurants fail within their first three years, according to a 2005 study by Ohio State University researchers.

To improve their odds of survival, many restaurants use consultants who specialize in areas ranging from marketing to location analysis and architectural design.

The Petaluma restaurant Graffiti turned to San Francisco architect Jim Maxwell to help with its design, creating both ambience and functionality.

"He actually had expertise in what color would set a mood to help people relax," said Maureen McGowan, who owns Graffiti with her husband. "He knew all that stuff."

Maxwell works with Full Plate Restaurant Consulting, a collective of consultants located across the Bay Area. Several of its experts will be hosting an all-day seminar at Sonoma State University on Saturday to provide information on how to get a restaurant off the ground or just retooled.

The collective was founded by Joan Simon, a longtime Cotati resident who specializes in marketing. It is not enough to have a passion for food or even to know how to cook a perfect souffle, Simon says. Instead, restaurateurs should focus on five elements to avoid becoming a flash in the pan.

Before anything else, a restaurant must establish its identity, Simon said.

Does it want to sell late night hot dogs to college students, or is it hoping to attract Sonoma County's swanky tourists?

"I sometimes get clients who want to be all things to all people," Simon said.

Instead, a restaurant should identify who its customers will be, what kind of food it wants to serve and how the restaurant's decor can accentuate its identity.

"What are people going to wear in the restaurant?" Simon said. "Identity is key."

A good lease can be a restaurant's best asset, Simon said.

So negotiating a long-term rental contract is clutch. Landlords looking to quickly fill a space might even agree to help build out the space, or make modifications.

Rent is a major cost for any business, and knowing it will not increase for five years is an important ingredient for success, Simon said.

A good lease can also increase a restaurant's value if the owner needs to sell. Having a lease that prevents the rent from tripling in two years is money that goes into the seller's pocket.

"You are selling a lease at a set price. Prospective buyers will know what one of their highest costs will be for five or six years," Simon said. "You always want to have an exit strategy."

''You can have loads of people walk in your door, but if your profit margins are not correct you can be losing a lot of money," Simon said. "It is a difficult business with tight profit margins."

A successful restaurant might have 12 to 20 percent profit margins, Simon said.

Restaurateurs need to set realistic projections for labor costs. The best food in the world might never get eaten if people are turned off by poorly trained or short-handed staff.

To help increase and maintain profits, restaurants also must price out the cost of each dish, adjusting for seasonal fluctuations in price. Dishes must be made with consistent portions to keep prices in line.

"Whether you have 4 ounces of crab meat in your pasta versus 5 ounces is a big difference in your food cost," Simon said. "Not enough people cost out their food."

Plus, having the recipes written down and not just in the chef's head is good insurance against disaster.

"I personally know two people who have been hit by a bus," Simon said. "I often tell clients, 'What if your chef becomes the third.' "

The Internet has changed some rules to marketing, but others remain the same. A well-trained staff is still a marketing must.

"The front of the house staff are your salespeople. It is crucial they understand what good service is about," Simon said.

Even the person who answers the phone can make a big difference.

"Owners need to recognize that the person on the end of the phone is their representative," Simon said. "If someone calls to make a reservation, and no one answers, they'll make reservations somewhere else."

Fostering relationships with hotels in the area is a good idea too.

"If you have one concierge who consistently sends you 10 people a night, that is worth more than all other kinds of advertising," Simon said.

Owners should also take full advantage of their menus to make customers aware of banquet rooms, special deals and other restaurant offerings.

As for the Internet, it has changed how restaurants can reach new customers.

"How do you promote your business without breaking the bank?" Simon said. "With the Internet, you can do it pretty easy these days."

Building a good Web site is key. And like with all other work, don't rely on family members or friends to do work if they are not a professional.

"People now go to Web sites all the time," Simon said. "Even a simple, small place needs to have a Web site."

A restaurant's Web site makes it easier for people to plan a meeting, showing everyone what is on the menu and how to get there. It also encourages people to order take-out.

"I had a small lunch-time restaurant build a Web site and see increased traffic from it," Simon said.

Web sites such as Yelp.com and citysearch.com let people review restaurants. So owners should monitor these sites to help control their public image.

"Everyone is a critic these days," Simon said.

Because of these sites, owners should not open until every last detail is in place.

"The idea of the soft opening is dead. You need to hit the ground running," Simon said. "Because the day you open, people will start writing about you."

Even though an owner is paying rent and wants to open, it is better to wait one or two weeks to make sure everything is just right.

A well-written business plan is a road map for any business owner. After working out the details about a restaurant's identity, labor and food costs, and marketing strategy, it will be a lot easier to compile the plan.

"Having a business plan where you have really thought things through is pretty critical," Simon said. "It's a map for opening your restaurant."

Some landlords -- especially in competitive locations -- won't rent out a space without first seeing a business plan.

"Savvy landlords want to see a business plan because they don't want their place sitting open," Simon said. "They know the failure rate of new restaurants."

You can reach Staff Writer Nathan Halverson at 521-5494 or nathan.halverson@pressdemocrat.com.

What: Restaurant Biz 101 -- "Everything You Need To Know"

Speakers: Jim Maxwell, architectural designer; Chris Pastena, chef and operations specialist; Joan Simon, marketing and planning consultant

When: 9 a.m. to 5 p.m. Saturday

Where: Sonoma State University

Cost: $200.

Registration: Must pre-register, 795-4885