Get your hands on a 'bed' of profitability

So how can you boost profits for your auto body repair business? Try following the lead of many other successful shop owners by opening a side business installing truck bedliners.

Unlike drop-in models, spray-on bedliners become part of the truck. The process involves spraying on a combination of chemicals — which varies depending on which manufacturer's product you select — that hardens almost instantaneously on the truck bed. The hardened coating provides a tough, abrasion-resistant lining that protects the truck bed from the elements.

Whether you set up a franchise business or a dealership arrangement with one of the many manufacturers, spray-on bedliners can be a lucrative side business to help your collision repair facility weather slow periods or just boost overall profits.

Strong market for trucks across country

Even though many Americans are downsizing their vehicles due to soaring gas prices, the light truck market continues to offer opportunities for collision repair shops looking to enter the aftermarket sector. According to consulting and research firm Frost & Sullivan, the North American light truck market generated about $1.6 billion in 2000 and has been experiencing steady growth since then, with revenues projected to reach approximately $1.9 billion next year.

Why has this sector performed so well? Let's take a look at the many benefits of bedliners. Not only do they enhance the appearance of trucks, but they also extend the life of the vehicle and boost resale value. Bedliners also form a barrier against moisture, helping prevent rust and corrosion on the truck bed, and help prevent the load from slipping around during transport.

Getting started

Before diving into this side business, however, it's important to weigh all the factors, including local demand for bedliners, market saturation and even the availability of sprayers. Don't take it for granted that the technicians already on staff will be as eager as you to explore this side business.

Jim Hill, manager of the Body Shop in Sparks, Nev., got out of the bedliner business after a couple of years, despite the fact that it was bringing in money. "It was profitable, but the techs really didn't like messing with the stuff," he says. "It was just too messy and nobody wanted to spray it."

But Bud Johnson, owner of ACME Collision in Springfield, Ore., has had a different experience. He got into the bedliner business about three-and-a-half years ago, and this side business has been going strong since. "At that time the bedliner business was really becoming well-known by the general public and well received, so it was a good time to start," he says.

A close association with a local dealership helped convince Johnson it was the right move. He knew how many trucks the dealership sold each month and already had a deal worked out with the dealership for parts, so adding on the truck accessories business seemed like a natural extension of the relationship. "Whether we could [install a spray-on bedliner] for the dealer directly or for the customer down the road," he says, "at least we knew what the need would be." Bedliner purchases also could be bundled into the initial truck purchase and financed along with it, which made it an especially attractive sideline for ACME Collision.

Johnson weighed the pros and cons of different bedliner business arrangements, exploring both franchise and dealership agreements. Franchise agreements often involve monthly fees for chemicals and equipment rental, while dealership agreements typically require a one-time up-front fee for the equipment and an agreement to purchase the chemicals each month as needed. An added bonus of dealership agreements is that most manufacturers designate a specific territory for each bedliner dealership — then you have a guarantee that no competitors will crop up within a 10-mile radius, or whatever the contract stipulates.

Consider the impact on your current business

Another factor to consider is the bedliner side business's potential impact on your primary business. In addition to buying or leasing the equipment, you need to find adequate space in your shop for an exhaust fan system and access to fresh air, as well as the technicians to run the equipment. Because the profit margin for bedliners is pretty narrow (approximately $200 to $250 per vehicle), Johnson says, "knowing the potential market out there was the first thing that intrigued me, but I had a large shop and had the space for it. And I only had to hire one person, a sprayer. That didn't really increase my overhead a whole lot."

But even if your overhead is low, there are other complications you may not realize until you get started. Johnson says he was surprised to find overspray from the equipment building up on the floor around the booth. It's common for the overspray to get up to four inches think, Johnson says, especially when the shop is busy and there isn't time to pause and take care of it right away. Eventually one of the techs has to use a chainsaw to cut the hardened bedliner material into small enough pieces to dispose of in a dumpster.

Training is important as well, Johnson adds. "If the equipment is out of whack or the chemical ratio gets out of line and doesn't harden properly, it's a hammer-and-chisel job," he says. "You have to know your stuff, know your equipment and be well-trained."

Now, how does it work?

The final step before deciding to invest in a bedliner business is learning the spray-application process. The entire bedliner process, from prep to spray, takes about half a day or less, depending on the time of year.

In summer when trucks tend to be dry, prep time is reduced. But when it's rainy, expect to have to take longer prepping each vehicle. Vehicles must be washed and then thoroughly dried before applying the chemicals. "You can't have any moisture — any trapped in the corner or anything will create a bubble when you spray it," says Johnson.

Before you begin, don't forget to monitor the humidity in the shop, cautions Johnson. "If the humidity is about 70 percent or higher, don't do it because it's likely to create a failure," he says. "That's something they don't tell you."

The next step is to rough the bed for better adhesion, then mask the truck tightly so no overspray gets on it. When the truck is properly installed in the spray booth area with adequate ventilation, and the technician is wearing the appropriate mask and protective gear, the spraying can begin. The technician then sprays the entire truck bed evenly with about four coats of chemicals.

After about 10 seconds a new bedliner is dry enough to walk on, and the trucks can be unmasked and driven out of the shop. If all goes smoothly, says Johnson, the process can be as fast as a couple of hours.

Value-added service — without insurer involvement

Rick Starbard had been running Rick's Auto Collision in Revere, Mass., for 20 years before investing in a bedliner dealership agreement about four years ago. Like Johnson's, his was a thoughtful decision based on exhaustive research. "I looked at products, talked to people, went online and did a lot of research online," he says. "There weren't many people in our area who were offering spray-on bedliners. So I looked at it as a value-added service we could add to the collision shop." Best of all, he adds, was that "prices weren't controlled by the insurance industry."

The set-up proved a little trickier. Although most of the equipment arrived in the initial start-up package from the manufacturer — Starbard has a dealership arrangement — he had to make modifications to the building, including installing a supplemental exhaust system and safety equipment. In the past year, new OSHA guidelines have forced him to enhance his air intake and exhaust systems.

All those startup costs continue to eat into profits for quite a while, something that may deter some shop owners from investing in a side business with a relatively small profit margin. Starbard acknowledges that it hasn't been entirely smooth sailing for his bedliner business either. "When gas prices were skyrocketing and people weren't buying as many pickup trucks, the business took a downturn," he says. "Recently it's picked up a bit, which is why I'm glad we're not doing it as a standalone business."

While the bedliner side business has given his collision repair shop a little boost, the shop remains Starbard's main revenue generator. "Comparing it to collision repair dollar versus dollar, the gross profit's definitely higher [of bedliner]," he says. "But to do that you have to be also running a factory doing it, and we do one or two a day."

Still, breaking into the bedliner business has had one unintended result — it's driven business to the body shop. People who need collision work done don't usually look for body shops on the Web, Starbard explains. They prefer going to the shop that fixed their neighbor's car or that sponsors the local little league team. But bedliners are a type of product people shop for on the Web, and when they search the manufacturer's Web site for a registered dealer, they come across Rick's Auto Collision.

"It's driven a lot of people into our shop," Starbard says. "We treat them well, so when they do have an accident, remembering that we do collision repairs, they come back to us for collision repair."