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==== The key messages of this factsheet are: ====

=== 1. Introduction ===

Considering the sanitation sector as a marketplace full of business opportunities, is not a new concept. The private sector – be it internationally operating large scale enterprises, social entrepreneurial programmes or small and micro-scale businesses of masons, plumbers, cleaners, emptiers or wholesalers – has often been ignored as a reliable alternative or addition to public service providers in the sanitation sector. As a result, particularly developing countries face major challenges in the delivery of safe sanitation products and services, which impacts most heavily on the economically poorer inhabitants.

=== 2. Market-based approaches ===

Market-based approaches to sanitation seek to address the challenge of financial sustainability, while empowering a local community and individuals to make their own decisions about obtaining sanitation products and services and strengthening the role of the local private sector. Sanitation is then seen as a vehicle for businesses to provide services and earn revenues that can be reinvested to keep expanding coverage of sanitation facilities and to develop economic activity while improving peoples’ living conditions.

The most effective anti-poverty measures are those that create sustainable and self-perpetuating local jobs. This could for instance be achieved by targeted investments in the sanitation sector in developing countries involving social entrepreneurs connecting investors with micro-entrepreneurs to serve the local market’s sanitation needs.

Essential to this approach is to consider the economic base of the pyramid. The BOP does not only include the very poor (those living on under EUR 1 per day, for which most likely only subsidised sanitation products realistically can provide sanitation as an alternative to open defecation or unsafe basic facilities) but also those people that have an income of up to EUR 5.68 a day (UNDP, 2008). Millions of people in the BOP – especially in urban settings – are already consumers of items that can be classified as “non-essential” items, such as mobile phones, which illustrates that the poor do have purchasing power to a certain extent. In order to harness the purchasing power of the BOP, sanitation needs to be turned into a demand (Jenkins, 2004). Opportunity means having access to information, products and service, whereas ability refers to necessary resources (financial, time, skills, decision making).

=== 3. Who does what in sanitation? Responsibilities of different actors ===

Collaboration between different public and private actors is crucial within the sanitation sector. The central government’s involvement is important for effective policy-making and funding as well as for setting up agreements with private corporations which then implement appropriate infrastructure. Local governments can play an important part in engaging with small and medium enterprises, NGOs, social entrepreneurs and the civil society.

*In general, governments are most likely to have the mandate and human resources for organising and mobilising communities and awareness raising. However, in certain country contexts with e.g. weak political structures and high rates of corruption it might be more appropriate that other stakeholders like the private sector, NGOs, international agencies or different mass communication media such as newspapers, radio, television or internet play an important role in this process.

*NGOs are mainly financed by public funds, and need partnerships with enterprises in order to carry out projects that have the potential for scale and replication.

*Labour unions may help in complex transitions of national public sanitation bodies or programmes (Heierli, 2004).

Apart from the discussion of who is involved in sanitation, it is of utmost importance not only to look at single components of sanitation but to consider the whole sanitation services chain. The following selection shows different revenue opportunities within the '''sanitation services’ chain''':

#Production of sanitation hardware

#Installation of sanitation systems

#Training and education

#Reuse of e.g. nutrients, water, organic matter and biogas by e.g. commercial farmers

Examples of sanitation as a business with reference to the revenue opportunities (in brackets) that they include are discussed in the next section.

=== 4. Examples of business approaches ===

The following examples for sustainable sanitation business approaches were provided mainly by members of the working group. They range from proven large business models. Giving these examples in this factsheet is not meant as a particular „endorsement“ of the business model but primarily as interesting examples on how businesses around sanitation could be set up and about the challenges they face in order to achieve a sustainable system.

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Please see numbered items in sanitation services’ chain above:

*'''Example for (2), (3) and (4) - Installation, operation, maintenance and advertising: Public toilet management in city areas in Kenya:''' Since 2007, David Kuria (elected as Ashoka fellow in 2007) has been working with social business models in his social enterprise EcoTact. One of EcoTact’s social business products is the Ikotoilet mall, a community hub of stores and services built around a public toilet complex. People can use the facilities, as well as buy products and services available in the mall, such as shoe shining or barber booths, food stalls, phone and newspaper stands.

*'''Example for (5) and (7) - Collection of faecal sludge and safe disposal or reuse:''' On-site sanitation (septic tanks and pit latrines) in cities of developing countries: Encouraging the development of products from excreta and identifying and developing markets for these products will help combat uncontrolled discharge of excreta, which is imperative to achieving public and environmental health objectives. In addition, it will also trigger private enterprise involvement in scaling-up and replication of such approaches (Koné, 2010). Urban-poor households will benefit from these improved business opportunities through lower costs for services, and improved quality and reliability, and availability.

*'''Examples for (1), (2) and (3): Creating jobs and income with mobile UDDTs (Urine Diversion Dehydrating Toilets) and UDDT business in India:''' Ecoloove is an interdisciplinary social venture, founded in 2008. Ecoloove was started with th e aim to develop affordable ecological sanitation (eco san) solutions for people in developing countries. A mobile ecosan system (UDDTs) was designed to be run by w omen living in slums in India.

*'''Examples for (2), (5) and (6): School toilet cleaning and maintenance services, training and hygiene education:''' In 1996 Trevor Mulaudzi launched “The Clean Shop”, a “clean-up business” for public toilets and school toilets in South African townships. This social enterprise succeeds in making sanitation a business by providing services and changing people’s mindsets about hygiene and cleanliness in public schools and communities.

The examples show that sanitation can be a profitable and viable business opportunity and offers many entry points in the value chain. In these particular examples, business was done by producing and installing sanitation products, providing maintenance or collection services, collecting user fees in public toilets and selling advertisement spaces in toilets and on vehicles. Other examples can be found for businesses in training and education and - possibly - reuse.

=== 5. Outlook ===

An observation from recent sanitation programmes is that they have been largely implemented by sanitation sector specialists, such as engineers, rather than business and marketing experts (Devine, 2010). This may be one reason that has contributed to the limited successes in scaling up projects to serve the mass market.

=== 6. Acknowledgements ===

SuSanA factsheet: Capacity development for sustainable sanitation. April 2012.[http://www.susana.org/en/ susana.org]