In the context of market-based sanitation (MBS)—through which private sector actors supply toilets and related services to individual households who pay for them—a strategy of many MBS programs is to increase the participation of local entrepreneurs in the sanitation value chain. Low viability of sanitation enterprises, however, often is a barrier to entrepreneurial participation, and as a consequence, impacts private sector supply in the market.
Sanitation enterprises should be viable and sustainable to attract and retain entrepreneurs. Put differently, sanitation enterprises should generate profits sufficient to offer entrepreneurs an attractive economic value proposition; the profit should be attractive relative to a variety of explicit or implicit factors considered by the entrepreneur (e.g., income from other non-sanitation business lines the entrepreneur may have, time and effort, or financial investment and risk). The design of the sanitation enterprise impacts its ability to generate a profit (or loss) and is, therefore, a critical intervention area for MBS programs.
The USAID/WASHPaLS desk review makes clear that multiple strategic choices exist for each of the four elements of a sanitation enterprise: the target market selection, the product system on offer, sales & marketing mechanisms to reach customers, and the delivery model to organize resources and fulfill demand (Figure 1). The interaction between these elements as well as the entrepreneur’s capabilities and assets determine the profit generated by an enterprise and its viability.
Figure 1: The Sanitation Market System – Framework for MBS
USAID/WASHPaLS developed a game called Designing Viable Sanitation Enterprises to serve as a tool for MBS practitioners to understand and appreciate:
The game consists of three components, all of which are available for download:
Interested stakeholders can use the game as-is or customize the materials and model for their contexts to train MBS practitioners or explore options.
We encourage users to share their feedback and experience using the game. Please write to the USAID Environmental Health Team Lead, Jesse Shapiro (firstname.lastname@example.org) or USAID/WASHPaLS Project Director, Morris Israel (morris.israel@WASHPaLS.org).