Market-based sanitation (MBS)—through which private sector actors sell toilets and related services to individual households—is a promising approach to deliver onsite sanitation products and services to low-income populations. The viability and sustainability of sanitation enterprises is a critical scaling barrier, among several others identified in a USAID MBS desk review.
Many MBS program implementers do not track their financial performance beyond sales. They need to understand the factors influencing the viability and sustainability of enterprises to recruit entrepreneurs and help them grow their enterprises. While MBS programs typically share information such as the market potential and product system design, they often struggle to discuss projected revenue and profit, which is of primary interest to entrepreneurs.
WASHPaLS developed guidance for practitioners and two toolkits to address these gaps based on methodologies used to analyze sanitation enterprise performance in three countries—Cambodia, India, and Nigeria.
Sanitation Enterprise Recruitment Toolkit
The recruitment toolkit helps MBS program implementers understand how to develop revenue, profit, and financial return projections with potential entrepreneurs. It is primarily useful for early-stage MBS programs that want to:
- Assess the profit generation potential and the financial returns of sanitation enterprise models and iterate if necessary.
- Recruit entrepreneurs to set up sanitation enterprises by helping them understand the financial opportunity.
Enterprise Viability and Sustainability (EVS) Diagnostic Toolkit
The EVS toolkit helps MBS program implementers diagnose the factors that differentiate the performance of enterprises at different levels of profits. This toolkit is designed for MBS programs at different stages of the program lifecycle. The toolkit can help meet several program objectives such as:
- Establish base-line, mid-line, and end-line performance beyond sales volumes.
- Generate insights on factors influencing viability and sustainability in programs’ operating contexts and craft performance improvement strategies.
- Identify low-performing enterprises in need of improvement to reduce attrition and/or strong performers who can further grow with additional support.
- Assess the sustainability of enterprises without program or other subsidized support to develop exit strategies for the program.