Publication Date

Sanitation Enterprise Viability and Sustainability Toolkits

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:

  1. Assess the profit generation potential and the financial returns of sanitation enterprise models and iterate if necessary
  2. Recruit entrepreneurs to set up sanitation enterprises by helping them understand the financial opportunity

For more details, refer to the Introduction to the Enterprise Recruitment Toolkit, also available in the toolkit.

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:

  1. Establish base-line, mid-line, end-line performance beyond sales volumes
  2. Generate insights on factors influencing viability and sustainability in programs’ operating contexts and craft performance improvement strategies
  3. Identify low-performing enterprises in need of improvement to reduce attrition and/or strong performers who can further grow with additional support
  4. Assess the sustainability of enterprises without program or other subsidized support to develop exit strategies for the program

The entire toolkit consists of four modules that MBS programs can execute sequentially but you may also choose modules using the chart below depending on your objectives, existing data on partner enterprises, and available resources. Refer to Introduction to the EVST, also available in the toolkit, for more details.

Explore modules by phase by clicking on the white boxes below:

Analytic activities

Analytic activities

Analytic activities

Analytic activities

Enterprise Mapping

Select diverse enterprises based on their market context and sales performance for in-depth research

Exploratory Research

Understand enterprises' contexts and operations to customize tools and research questionnaires

Profit & Loss Statement Preparation

Prepare profit & loss (P&L) statements with revenues, costs, and resulting profits to support analyses

Profit & Loss Statement Analysis

Analyze P&L statements using financial ratios to enable inter-enterprise comparison

Enterprise Classification

Categorize enterprise based on revenue and profit

Gross Margin Variance Analysis

Identify the profit drivers that differentiate performance among enterprise categories

Strategy Identification

Identify the strategies that improve profit of enterprises in different contexts

Financial Independence Assessment

Assess enterprises' ability to meet recurring future financial investments independently

Operational Independence Assessment

Assess enterprises' ability to operate independently in future market conditions

Return on Capital Employed Analysis

Compute returns from sanitation relative to other opportunities available to the entrepreneur

Note: Adaptation guidelines and interview guides are supplementary materials that are referenced in the introduction and in different modules of the toolkit.

Stay tuned to this page for upcoming additional resources for practitioners.