WATER SERVICES TRUST FUND
Up-Scaling of Basic Sanitation for the Urban Poor (UBSUP)
UBSUP Business Models and Business Plans
Prepared by the UBSUP Team
October 2014
Water Services Trust Fund (WSTF) – Up-Scaling of Basic Sanitation for the Urban Poor (UBSUP)
UBSUP Business Models and Business Plans
Table of Contents
1.
2.
Introduction .................................................................................................................................... 5
1.1
Linking to UBSUP Documents ................................................................................................. 5
1.2
How to use this document? .................................................................................................... 6
The Development of UBSUP Business Models................................................................................ 7
2.1
2.1.1
Local Artisans .................................................................................................................. 7
2.1.2
Manual Emptiers ............................................................................................................. 7
2.2
3.
The SafiSan Artisan Business Model ....................................................................................... 8
2.2.1
The Individual Artisan ..................................................................................................... 8
2.2.2
The SafiSan Artisan ......................................................................................................... 9
2.2.3
The SafiSan Artisan Company ......................................................................................... 9
2.2.4
The Proposed SafiSan Artisan Company Business Model ............................................... 9
2.3
The Sanitation Team Business Model ................................................................................... 13
2.4
The DTF Operator Business Model ....................................................................................... 17
2.4.1
Private Operator ........................................................................................................... 17
2.4.2
WSP operated DTF ........................................................................................................ 17
2.4.3
Private Sector Participation (PSP) models for DTF........................................................ 18
2.4.4
The Proposed DTF Operation Business Model ............................................................. 18
UBSUP Business Plan Templates ................................................................................................... 23
3.1
The SafiSan Artisan Business Plan Template ........................................................................ 23
3.1.1
Company Description .................................................................................................... 23
3.1.2
Products & Services....................................................................................................... 24
3.1.3
Market Analysis ............................................................................................................. 25
3.1.4
Strategy & Implementation .......................................................................................... 27
3.1.5
Management Summary ................................................................................................ 30
3.1.6
Financial Plan ................................................................................................................ 32
3.2
4.
Existing Business Models in Low-Income Areas...................................................................... 7
The SafiSan Sanitation Team Business Plan Template .......................................................... 34
3.2.1
Company Description .................................................................................................... 34
3.2.2
Products & Services....................................................................................................... 34
3.2.3
Market Analysis ............................................................................................................. 35
3.2.4
Strategy & Implementation .......................................................................................... 37
3.2.5
Management Summary ................................................................................................ 40
3.2.6
Financial Plan ................................................................................................................ 40
3.3
The SafiSan DTF Operator Business Plan Template .............................................................. 45
3.4
Cooperation between SafiSan Entrepreneurs ...................................................................... 47
Conclusions and Way Forward...................................................................................................... 49
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UBSUP Business Models and Business Plans
Table of Figures
Figure 1 - The SafiSan Artisan Company Business Model ..................................................................... 10
Figure 2 - The SafiSan Sanitation Team Business Model ...................................................................... 13
Figure 3 - The SafiSan DTF Business Model .......................................................................................... 19
Figure 4 - Sale of SafiSan Toilets during Pilot Phase ............................................................................. 26
Figure 5 - Projected Sale for SafiSan Artisan Company ........................................................................ 29
Figure 6 - Projected Turnover for SafiSan Artisan Company ................................................................ 30
Figure 7 - Projected Sale and Staff Need for SafiSan Artisan Company................................................ 31
Figure 8 - Sales Forecast for Sanitation Team Company (Absolute Figures) ........................................ 38
Figure 9 - Projected Turnover for SafiSan Sanitation Team .................................................................. 39
Figure 10 - Projected Turnover for SafiSan Sanitation Team with Adjusted Market Shares ................ 40
Figure 11 - Profit Share Development in Relation with No. of UDDTs ................................................. 44
Figure 12 - Cooperation between SafiSan Stakeholders ...................................................................... 47
Figure 13 – Potential Activities covered by the Sanitation Agent Model ............................................. 48
Table of Tables
Table 1 - Projected Costs and Need for External Personnel for SafiSan Artisan Company .................. 32
Table 2 - Simplified Profit and Loss (P&L) Statement for SafiSan Artisan Company ............................ 33
Table 3 - Assumption for SafiSan Artisan Company P&L ...................................................................... 33
Table 4 - Scenarios for Emptying Sales Forecast................................................................................... 39
Table 5 – Assumptions Underlying the Simplified Profit and Loss (P&L) Statements .......................... 41
Table 6 - Simplified Profit and Loss (P&L) Statement for Scenario 1 .................................................... 41
Table 7 - Simplified Profit and Loss (P&L) Statement for Scenario 2 .................................................... 42
Table 8 - Simplified Profit and Loss (P&L) Statement for Scenario 3 .................................................... 42
Table 9 - Assumptions Underlying the Recommended Business Setup ............................................... 43
Table 10 - Simplified Profit and Loss (P&L) Statement for the Recommended Business Setup ........... 43
Table 11 - Profit Share Calculation........................................................................................................ 44
Table 12 - Calculation O&M Costs for a SafiSan DTF Serving 5,000 People ......................................... 45
Table 13 - Overall Cost Calculation for Sanitation Shilling .................................................................... 46
Table 14 - Calculation of the Sanitation Shilling ................................................................................... 46
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Water Services Trust Fund (WSTF) – Up-Scaling of Basic Sanitation for the Urban Poor (UBSUP)
UBSUP Business Models and Business Plans
Abbreviations
B2B ........................................................... Business-to-Business
BoQ .......................................................... Bill of Quantities
BOT ........................................................... Build, Operate, Transfer
DTF ........................................................... Decentralized Treatment Facility
KSh ........................................................... Kenyan Shilling
LIA ............................................................ Low-Income Areas
m3 ............................................................. Cubic Metre
O&M......................................................... Operation and Maintenance
P&L ........................................................... Profit and Loss
PHO .......................................................... Public Health Officer
PSF ............................................................ Public Sanitation Facility
PSP ........................................................... Private Sector Participation
SaniGO...................................................... Cart developed for the SafiSan emptying activity
UBSUP ...................................................... Up-scaling of Basic Sanitation for the Urban Poor
UDDT ........................................................ Urine Diversion Dehydration Toilet
WASREB ................................................... Water Services Regulatory Board
WSTF ........................................................ Water Services Trust Fund
WSB .......................................................... Water Service Board
WSP .......................................................... Water Service Providers
WTTP ........................................................ Waste Water Treatment Facility
References
Berry, T.L Hurdle: The book on Business Planning, www.hurdlebook.com.
MajiData, www.majidata.go.ke.
Osterwalder, A. et al.: Business Model Generation; New Jersey, 2010.
UBSUP Document No. 12 - The Financing and Business Model.
UBSUP Document – Key UPC-UBSUP Procedures for SafiSan Projects.
UBSUP Document – O&M Costs Calculation for DTF Composting
UBSUP Document – Concept for the Treatment of Sludge and the Operation of Semi-Decentralised
Treatment Facilities (“Sanitation Centre”).
UBSUP Document Integrating SafiSan Operators within UBSUP.
UBSUP Sanitation Study
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UBSUP Business Models and Business Plans
1. Introduction
The Up-Scaling of Basic Sanitation for the Urban Poor (UBSUP) Programme offers a solution for Water
Service Providers (WSP) in Kenya to improve the sanitation situation in low-income areas (LIA) within
their service areas. This includes the provision of affordable toilets, provision of emptying and
treatment services and strategies for re-use or safe disposal of the waste water and sludge. The project
focuses on the whole sanitation chain. Within the sanitation chain, there are plenty of potential
business models for (small-scale) entrepreneurs.
This document provides a set of business models and plans which can be implemented along the
sanitation chain. It is based on the UBSUP document No. 12 - The Financing and Business Model which
provides background information on the sanitation value chain, risks and roles of the private sector.
This document specifically provides business plan templates for service delivery along the sanitation
value chain. It should act as a guiding document which provides opportunities and food for thought
which need to be adapted to local circumstances during the up-scaling process of UBSUP.
The document is structured as follows:




Chapter 1 is giving introductory notes and explain on how to link this document to other
relevant UBSUP document, including Document 12 The Financing and Business Model.
Chapter 2 is developing business models for the delivery of relevant sanitation services within
UBSUP
Chapter 3 is providing template business plans for selected sanitation activities within the
UBSUP programme.
Chapter 4 concludes this document and draws a way forward.
1.1
Linking to UBSUP Documents
The UBSUP document No. 12 - The Financing and Business Model already elaborated on important
aspects and risks within the sanitation value chain. In addition, it discussed in detail important
considerations during the development of business models.
The document followed the methodology developed in Osterwalder, A. et al.: Business Model
Generation; New Jersey, 2010; which allows designing several potential business models focusing on
sanitation provision under UBSUP. It follows the use of the business model canvas tool which has been
elaborated in detail in Document No. 12.
The Document 12 was prepared before the start of the pilot project implementation of UBSUP. The
pilot phase finished in May 2014 and the up-scaling process started in June 2014. During the piloting
period of more than one year, concepts and argumentations have changed. Some ideas which were
proposed in the initial document have been tested in the pilot and changed based on the experience
gathered in the field. One example, is the proposal of Document No. 12 to pay the subsidy to the
artisans instead of the landlords. During pilot testing it was realized that this would not be the best
way of implementation and most landlords were not willing to adopt it. Therefore, the concept
changed towards paying the subsidy mainly to the landlords.
Although some aspects of Document No. 12 are outdated or wrong, it still reflects important
considerations and argumentations for the development of concrete business models. Therefore, it
has been decided not to update Document No. 12 with the findings from the pilot phase but rather
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UBSUP Business Models and Business Plans
develop a new document (this document) to highlight the new findings in respect to the business
aspects of UBSUP. It may be necessary to develop an additional business model document after
gaining some experiences within the up-scaling phase.
The work prepared in Document No. 12 prepared the base of concrete business models ready for
testing which are presented in this document. The models follow a scenario-guided design which helps
to render the abstract tangible. The scenarios are mainly looking at two different aspects: (1)
identifying different customers’ behaviours and their effects on the business, and (2) identifying future
environments in which business models may compete. Applying scenario planning techniques to
business model development helps to reflect on how a model may have to evolve under certain
conditions.
In addition to Document No. 12, there are other UBSUP documents which are relevant for the
development of this document such as documents prepared on emptying practices (UBSUP Document
Integrating SafiSan Operators within UBSUP) and treatment technologies.
1.2
How to use this document?
This document is developing business models and providing template business plans for business
activities within the UBSUP programme. The main user of this document is the UBSUP Team, its
stakeholders, the WSPs and interested entrepreneurs.
The Business Models presented in Chapter 3 should help the WSTF, the WSPs, the UBSUP team and
other relevant stakeholders to understand how and which concrete business opportunities may exist
in UBSUP. It gives arguments and recommendation on how, for example, the Decentralized Treatment
Facilities (DTF) should be operated. What would be the consequences if a private operator is in charge
of the DTF? Or, should Sanitation Teams be private entrepreneurs or employees of the WSP?
The Template Business Plans in Chapter 3 give concrete guidance for entrepreneurs on how to plan
and organize a business within UBSUP. They include a financial analysis and demand assessment.
Entrepreneurs who show interest in building a business related to UBSUP can use them. They need,
however, to adjust them according to local circumstances.
Calculations, argumentations and demand assessments should be used in presentations and trainings
during the up-scaling workshops implemented by the WSTF and UBSUP. It should give food for thought
to the participants and encourage discussions on the possibility of testing of several (aspects) of the
business model. The models and plans developed herewith are not cast in stone, they actually do need
adjustments based on local circumstances.
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UBSUP Business Models and Business Plans
2. The Development of UBSUP Business Models
There are already several business initiatives linked to the sanitation chain going on at the moment in
low-income areas in Kenya. They are mainly focusing on emptying toilets (such as pit latrines) or
unblocking sewer lines. The current practices are not necessarily following any business plans or
strategies. They have evolved out of a need and/or opportunity basis. Currently, involvement in
sanitation practices is not necessarily a business area people are keen to enter.
The UBSUP programme is promoting sustainable and improved sanitation practices. This is linked to
the provision of sanitation services, such as emptying of toilets, treating waste water/sludge and
reuse. In order to ensure sustainability, the programme is involved in improving improve income
generating activities related to the sanitation service delivery through designing of business models
and provision of the required tools for starting the business.
2.1
Existing Business Models in Low-Income Areas
There are already several business activities ongoing in low-income areas which are relevant for the
implementation of the UBSUP programme. Several activities along the sanitation value chain are
expected to be delivered through (existing) private entrepreneurs. This subchapter briefly describes
two of them. More information, especially in regard to the emptying activities can be found in the
UBSUP document Integrating SafiSan Operators within UBSUP of July 2014.
2.1.1 Local Artisans
The construction business is booming in Kenya. Not only in the rich or commercial area but as well in
the low-income areas. Therefore, plenty of skilled and unskilled worker find (temporary) employment
within the construction sector. UBSUP is to make use of these entrepreneurs and motivate (some) to
focus on the business of constructing SafiSan infrastructures.
Looking at a low-income area one can find mainly two different types of employment models in the
construction sector: (1) the artisan who has his own workshop and who wants to make a living out of
construction/artisan work, and (2) the (un-)skilled worker who works in the construction sector until
something better comes up. During the pilot phase there were some cases where artisans started to
construct SafiSan toilets but abandoned them as soon as better opportunities came up. It is a common
practice that those permanent artisans uses (un-)skilled workers for their construction projects. The
workers are paid per day whereas the artisan is paid a negotiated lump sum.
2.1.2 Manual Emptiers
Manual emptying is a common activity in low-income areas in Kenya. In many cases it is not an
established business but rather executed by individuals or groups within a community who are just
trying to make a living with all different kind of jobs. It is common practice that those people do several
different jobs not necessarily focusing only on sanitation related activities.
Interviews with a Sanitation Group in Nakuru revealed that apart from removing blockages on sewer
lines they are as well working in markets helping to move goods and focus on any other income
generating activities. The existing business models of the manual emptier will allow them to only focus
on sanitation related income generating activities in rare cases.
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The toilet emptying activity is generally not considered as a profession due to many different reasons,
e.g. stigmatisation, illegality of the business, health risks. It is the intention of the UBSUP programme
(and this document) to formalize this activity and to change its public perception.
2.2
The SafiSan Artisan Business Model
The UBSUP project offers a wide range of different toilet models and technologies. Most of the models
need the involvement of a local artisans for construction services. The artisan is provided with the
toilet designs (technical drawings) and information about the toilet operation. The artisan is in charge
of the construction of the toilet. The selection of the artisan is done by the customer. Some customers
may opt for an artisan who already worked for that client in the past. Other clients may prefer an
artisan who has been trained by the project and/or has already constructed several SafiSan toilets.
The UBSUP project is currently looking into pre-fab toilet production with the aim of further reducing
the cost of the infrastructure. For the time-being, first contacts have been made and first pilot testing
results are promising in terms of improved quality and reduced costs. This development has a direct
impact on the potential business model of an artisan. Currently, the cheapest available toilet model
built by an artisan costs approximately 34,000 KSh. The pre-fab toilet is expected to be (slightly)
cheaper than the current models.
The overall cost of 34,000 KSh includes a subsidy of 20,000 KSh provided by the project. Therefore,
the actual cost of the toilet paid by the landlord/household is 14,000 KSh. However, the
landlord/household has first to provide the full investment cost and then apply for reimbursement
with the subsidy after a successful quality appraisal has been done by the WSP.
All the above issues have to be considered when designing a sustainable business model for the
SafiSan Artisan. The following scenarios are anticipated for SafiSan Artisans:
1) The Individual Artisan: An individual artisan working in different construction projects
including SafiSan toilet construction.
2) The SafiSan Artisan: An individual artisan only providing construction services for SafiSan
toilets.
3) The Artisan Company: A group of artisan/worker being employed by a company to provide
construction services.
2.2.1 The Individual Artisan
The individual artisan model is a commonly existing business model in Kenya’s low-income areas (LIA).
Those are mainly skilled or unskilled workers which are hired on a short-term basis for any kind of
construction works. Normally, they do not consciously follow a business model; they basically try to
make a living.
The development of a SafiSan business model for individual artisans is tricky. Individual artisan will
only provide services for SafiSan if (1) the expected economic benefit is of interest, or (2) if there are
no other more lucrative opportunities available. The implementation of the pilot projects showed that
other opportunities within the construction sector are more lucrative than the construction of SafiSan
toilets. Not only is the income level of importance but as well the duration of an assignment. In several
occasion, an artisan started the construction of a SafiSan toilet but delayed (or abandoned) it after he
gained an additional employment with another construction opportunity. Apparently, a lot of low8|Page
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UBSUP Business Models and Business Plans
income areas are undergoing slum-upgrading. Privately-initiated land development is ongoing and is
providing a lot of opportunities for casual workers in construction.
The individual artisan will always follow opportunities as they come. He will not specifically focus on
SafiSan toilets but will consider them rather as an add-on to his existing service portfolio.
From the programme’s perspective, the involvement of individual artisans is not the preferred model.
During piloting it has been encountered that there was a lack of available artisans for toilet
constructions especially after big construction projects in the pilot areas came up. Therefore, the
business model for the individual artisan will not be elaborated further since it should not be the
preferred option to be promoted from the project's perspective.
2.2.2 The SafiSan Artisan
The model of the SafiSan Artisan is looking at an individual providing only construction services for
SafiSan. The core idea of this business model is that the artisan becomes an expert in SafiSan toilets
and as such his services are known for high quality and quick construction. The motto of this business
model is to provide high quality sanitation infrastructures at an affordable price within a short time
period.
2.2.3 The SafiSan Artisan Company
The SafiSan Artisan Company business model is basically a potential outcome of the SafiSan Artisan
business model. At one point, the potential work for the SafiSan Artisan may become too much to
handle alone. In order to not lose out those opportunities he may hire workers/artisans to being able
to satisfy all potential clients. That is the business idea of the SafiSan Artisan Company. It does not
need much time to transform from a one-man-show artisan to a company providing artisan services.
This has been experienced during the pilot phase implementation of the UBSUP project: In the Nakuru
pilot zone, a pro-active artisan saw the business opportunity in SafiSan and evolved from a one-man
artisan to a head of more than 30 workers within a period of two to three months. In this particular
case, the workers were paid a fixed daily rate and employed on a needs basis.
This development conforms to the idea behind the business model of the SafiSan Artisan Company.
2.2.4 The Proposed SafiSan Artisan Company Business Model
The following sketch points out the most important elements of the business model for the proposed
SafiSan Artisan Company business model. It follows the business model canvas developed in
Osterwalder, A. et al.: Business Model Generation; New Jersey, 2010.
The sketch gives a direct overview on the core items of the business model. It should help interested
entrepreneurs to understand the key elements of success of the model. Artisans interested in
establishing their SafiSan Artisan Company should tailor this model to meet their specific demands.
Following the sketch, each element of the business model canvas is further explained within this
chapter. Before preparing a business plan, it helps to run the exercise of the business model canvas in
order to understand the key elements of one’s business model. Those elements should be reflected
in the business plan.
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Value Propositions
Customer Segments



Landlords
SafiSan Toilet
Owners
Conventional
Toilet Owners

Professional and
efficient
construction
service for SafiSan
toilets
Channels


SafiSan Social
Animators
Mouth-to-Mouth
Propaganda
Customer
Relationships

Cost Structure



SafiSan Artisan
Company
Material
Daily labour
Fixed costs related
to operation
Revenue Streams

Key Partnerships



WSP
Suppliers
Customers
Personal customer
relationship
Sale of
construction
services for
SafiSan
infrastructures
Key Resources

Key Activities



Construction of
SafiSan
infrastructures
Networking &
marketing
Procurement of
material

Knowledge of
constructing
SafiSan
infrastructures
Networking with
relevant
stakeholders
Figure 1 - The SafiSan Artisan Company Business Model
Following the rationale above, the proposed business model for artisans is mentioned below. It follows
the application of the business model canvas.
Customer Segments
The SafiSan Artisan will focus on one specific customer segment: landlords / house owners / tenants
with a lack of adequate sanitation infrastructures. The potential customers very much depend on the
areas the SafiSan project is focusing on, since the provided subsidy for SafiSan toilets is the main
reason why people would invest in improved sanitation. Consequently, it will be the main booster for
the SafiSan Artisan business model.
The business model, therefore, starts by focusing on a niche market: the market is limited by project
areas and need of improved sanitation infrastructure. During the evolution of the artisan’s business,
this may change. It can be imagined that even without the subsidy (therefore removing the project
area boundary) people may request the construction services for a SafiSan toilet.
Value Proposition
When a customer decided to opt for a SafiSan toilet, he/she has to select an artisan to build the
infrastructure. Some customer may have their own artisan. However, many customers may opt for a
specialized SafiSan Artisan with plenty of experience in constructing high quality SafiSan toilets.
Consequently, the value proposition of the SafiSan Artisan is to offer a high standard infrastructure at
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an affordable cost within a short timeframe. As a result, several elements of the value proposition
such as performance (good service delivery), customization (experience in customizing toilets),
“getting the job done” and price will apply for this business model.
Channels
The channels describe how the business communicates and reaches its customer. The business model
described within this chapter is focusing on a much localized market (one or more low-income areas
within the same town). This may change during the evolution of the business; however, each SafiSan
Artisan may start with a limited outreach.
Most of the marketing about sanitation and the SafiSan project will be catered for by the SafiSan
project itself. Demand creation for improved sanitation will be tackled. The SafiSan Artisan, however,
has to promote his services and quality of work. Experiences from the pilot project showed that those
artisans within a project area with a lot of experience in constructing good-quality toilets gathered
more business opportunities within the course of the project than others. This mirrors the basic
principle of the SafiSan Artisan business model: becoming an expert / a reference for SafiSan toilet
construction.
A main channel for marketing is the mouth-to-mouth propaganda. Since the SafiSan toilet will be new
to an area, the impact of a personal recommendation for an artisan by a satisfied customer is of high
value for the business model. The after sale as well becomes important for the SafiSan Artisan concept
since it helps the business to distinguish itself from competition. If the SafiSan Artisan can offer a
guarantee for the constructed toilet; he may even create an additional revenue stream.
Customer Relationships
The nature of the SafiSan Artisan business model includes a personal customer relationship since the
toilet construction will be done by the artisan himself. With the introduction of pre-fabricated toilets
the customer relationship would change towards a self-service.
Revenue Streams
The main revenue stream is generated through the sale of the construction services. There are,
however, several other potential revenue streams which would help the business to diversify its
income sources. A SafiSan Artisan may, for example, offer to its customer a guarantee for the toilet
for a fixed period at a fixed price. If any (justified) repairs would have to be done within the guarantee
period, the artisan would do them at no additional cost. This stream follows the idea of an insurance
where each customer pays a fee for a service they hopefully may not need but if they need it, the
service would come at no additional cost.
Another revenue stream is the saving on material cost. Bundling the procurement of several toilet
construction materials will allow the artisan to procure the material at a lower cost. This effect may
only occur at a later stage of the business. A successful business venture will continuously look into
finding additional revenue streams to reduce the risks of one stream drying out and in order to
continuously grow the business which will need more funds to operate.
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Key Resources
The key resource for the SafiSan Artisan is the knowledge of constructing the SafiSan toilet. Technical
drawings, Bill of Quantities (BoQ) and further documents will be provided by the UBSUP programme
through the WSPs. It would be recommendable that the artisan participates in the artisan training at
the beginning of each SafiSan project. This would be the basis for the business model since it may lead
to certification by the WSP. A general assumption is: the better the knowledge on the construction of
sanitation infrastructure, the more business opportunities will occur.
During the evolution of a one-man show to the artisan company, the staff will become a key resource.
It is important that every additional partner or staff member adds an additional benefit to the
business. In the beginning, the SafiSan Artisan may hire some skilled workers to do some basic
construction jobs. At one point, the administration part of the business will need support.
Key Activities
The key activity is the construction of SafiSan toilets. A satisfied customer may come back to the
artisan to request additional construction works. There might be a tendency that the additional
construction work may become the focus of the artisan since it seems to be more lucrative. This would
go against the basic idea of this specific business model and the artisan may lose his added value he
gained through becoming THE SafiSan Artisan. Therefore, it is recommended that the artisan should
focus on sanitation related infrastructure only. Depending on the development of the business, the
SafiSan Artisan business model may slowly grow into the Artisan Company business model which
would be a good development from a business perspective.
Key Partnerships
There are several key partners for the SafiSan Artisan. A core marketing strategy will be the mouthto-mouth propaganda. Therefore, the artisan needs to maintain a close contact to his customers.
Apart of promoting his services, there may be as well another revenue stream, such as additional
construction works coming up.
Another key partner is the WSP. The WSP may certify the SafiSan artisans. In addition, it is expected
that quite a number of SafiSan clients may enquire through the WSP about good artisans. The SafiSan
Artisan should actively promote his services to the WSP in order to get more customers. The WSP
should be interested in supporting proactive SafiSan Artisans since they want to ensure that the toilets
are built according to certain quality standards. The artisan may even request information on new
SafiSan customers to actively approach them.
Further key partners include providers of construction material. By bundling the procurement of the
needed material it is expected that the artisan can make additional savings on the cost of material. In
addition, having a continuous business relationship with a small number of suppliers as well will allow
the artisan to have some material pre-financed by the supplier.
Key partners could include as well the Public Health Officer (PHO) or other relevant stakeholders.
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Cost Structure
There are basically two different types of costs which come with almost every business model: fixed
costs and variable costs. Fixed costs describe expenditures that remain the same despite the volume
of goods produced. These include salaries, rent, power supply, airtime, etc. Variable costs change
proportionally with the volume of goods and services produced.
Looking at the business model of the SafiSan Artisan it should be intended to keep the fixed costs as
low as possible. In general, no much fixed costs are needed to put the business of a SafiSan Artisan
into motion. Not even an office or workshop would be needed in the beginning.
The variable costs for the SafiSan Artisan business model will very much depend on the business
development. They will occur with the first client and will proportionally increase with every additional
client; however; revenue is expected to increase at the same time and at a higher pace.
The effects of economies of scale and of scope will come in with the expansion of the business.
Economies of scale will come in when procuring material for more than one toilet. The cost of material
per toilet should go down proportionally with every additional toilet. Economies of scope will come in
if the SafiSan Artisan starts diversifying his product range. A new product added to your catalogue can
be sold through the same marketing channels like the other products. Therefore, the proportion of
marketing expenses per product will go down.
2.3
The Sanitation Team Business Model
The Sanitation Team is a person or a group of entrepreneurs which are offering sanitation emptying
services among others activities. Currently, these services are provided by manual emptiers.
Value Propositions
Customer Segments



SafiSan Toilet
Owners
Conventional
Toilet Owners
Customers
interested in
cleaning services


Professional and
clean emptying
services
Additional
sanitation related
services
Channels


SafiSan Social
Animators
Mouth-to-Mouth
Propaganda
Customer
Relationships

Cost Structure


SafiSan Sanitation
Team
Rent for office and
space
Fixed costs related
to operation
Personal customer
relationship
Revenue Streams



Emptying of toilets
Delivery of toilet
content to DTF
Composting
Key Partnerships



WSP
PHO
Customers
Key Resources

Key Activities



Emptying toilets
Providing additional
sanitation activities
Composting



Knowledge of properly
emptying toilets
Professional emptying
equipment (e.g. SaniGO)
Contacts to relevant
stakeholders
Provisions for composting
Figure 2 - The SafiSan Sanitation Team Business Model
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The underlying idea of the business model for the SafiSan Sanitation Team is the provision of sanitation
services. This can include emptying of SafiSan and other toilets, cleaning of toilets, composting of toilet
content from SafiSan toilets, and everything related to provision of sanitation services.
Adopting the Business Model Canvas results in the following:
Customer Segments
The customer segments of the SafiSan Sanitation Team are not limited to any areas like with the
SafiSan Artisan business model. Clearly, the SafiSan Sanitation Team can profit from the SafiSan
project initiatives, however, customer segments include anybody with a sanitation infrastructure.
More business may be generated from clients with SafiSan toilets but there this clearly demand for
emptying services of conventional toilets.
Therefore, the following customer segments can be identified:
1) SafiSan toilet owners (UDDT, septic tanks, conservancy tanks)
2) Other improved toilet owners (VIP, septic tanks, conservancy tanks)
3) Customer interested in cleaning services for all types of toilets
The customer base is segmented and each segment comes with unique needs, services, prices, etc. A
SafiSan customer should be approached differently than an owner of other improved toilet. The
emptying process, for instance, is clean, efficient and well-known for a SafiSan toilet. Emptying a
(dilapidated) pit latrine may be remarkably more difficult and as such more expensive for the customer
than emptying of a UDDT, septic tank or a conservancy tank.
Value Propositions
The profession of existing manual emptiers is neither legalized nor formalized. The SafiSan Sanitation
Team are expected to be licensed and work within the formal service provision in the water sector.
They are to operate with protective gear and right tools and equipment which allow team members
recognition and quality service delivery.
Therefore, the value proposition of the SafiSan Sanitation Team comprises of several elements:




Professional emptying service for SafiSan toilets: the teams will be equipped with needed
tools such as the SaniGo (a cart developed under the UBSUP programme to transport toilet
content to the treatment facility). Members will be trained on efficient and clean emptying
for the SafiSan toilets
Quality emptying services for conventional toilets: the SafiSan Sanitation Team will be
trained on how to empty other existing improved toilets. They will be able to provide a safe,
clean and more efficient emptying service (reduced public health risks).
Composting: The composting aspect can be an interesting alley. It depends very much on the
potential demand (e.g. from farmers). Sanitation Teams could operate small composting fields
and sell the end product as soil conditioners or fertilizer.
Operating Public Sanitation Facilities: the combination of operating public toilets with
providing all relevant sanitation services can be an interesting option. However, the market
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

entry barrier (e.g. investment costs) are very high and may not be feasible for most of the
interested entrepreneurs.
Selling sanitation hardware: Trying to create a one-stop-shop for sanitation services within a
low-income area may as well look at selling relevant sanitation hardware. Again, the market
entry barriers may be too high for most interested entrepreneurs.
Additional services: The SafiSan Sanitation Team may as well offer toilet cleaning services at
additional costs. All services related to sanitation can be (theoretically) covered by the team.
The provision of sanitation services is still very much underdeveloped in Kenya. Therefore, it is
expected that the provision of professional, safe, clean, efficient and affordable sanitation services
will create a lot of demand since a lot of toilets in low-income areas in Kenya are not linked to any
sanitation services and are currently very much depending on existing poor emptying services
provided by manual emptiers.
Channels
There are different channels for reaching the customer segments. Promotion of services may be part
of the social marketing campaign of the SafiSan project. Therefore, one channel of reaching customers
is through the WSP which is in charge of SafiSan project implementation. Another channel for new
customer acquisition is through the SafiSan artisans.
Direct marketing and after sales will focus on a direct channel between customers and the SafiSan
Sanitation Team.
Customer Relationships
For all outlined customer segments, a direct relationship with the customer is foreseen. The SafiSan
Sanitation Team could as well try to utilize communities to raise awareness about improved sanitation.
This may lead to additional business opportunities for the SafiSan Sanitation Team.
Revenue Streams
The core business of the SafiSan Sanitation Team is the emptying of SafiSan and other improved
toilets. Therefore, this will be the main revenue stream. However, plenty of other sanitation related
services can create revenue. The professional cleaning services for toilets can be one of them.
Since the SafiSan Sanitation Team and the SafiSan Artisan are both working in sanitation and both
business rely on each other, another revenue stream for both could be a commission based
recommendation could be introduced. If the SafiSan Sanitation Team manages to convince the owner
of a conventional toilet to upgrade his toilet to a SafiSan toilet through the utilization of the SafiSan
Artisan, they could be entitled to a sales commission. The same could work the other way around.
Since the SafiSan Sanitation Team will provide services to a substantial number of clients with
substandard toilet infrastructures, it would be very interesting for the SafiSan Artisan to market their
services with those clients. Even service provision to public toilets, office buildings, etc. could be
imagined.
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Another interesting revenue stream which the UBSUP programme is currently investigating is the
possibility of a small payment to SafiSan Sanitation Team at the Decentralized Treatment Facility (DTF)
for delivering the toilet content to motivate the emptiers to properly dispose the toilet content.
The idea of composting toilet content could be a promising venture in some areas of Kenya. However,
currently, only little practical experience is available within the UBSUP programme.
In general, when thinking about potential income streams for the Sanitation Team business model one
has to be careful of not losing the focus of the initial idea. The business will go where the most money
can be generated. Ultimately, this may result in a Sanitation Team abandoning the emptying activities
since they can earn more money (with less input) through, for instance, selling toilet hardware. This
would be a development which is not appreciated at least from the UBSUP programme’s point of view.
Looking at the pricing mechanisms, the potential models are almost unlimited. They can range from
pay-per-emptying, cards for 10 emptying to monthly payment. Services could be provided on different
level: basic, intermediate and premium.
Key Resources
The key resource of the SafiSan Sanitation Team is the professional equipment to empty SafiSan
toilets. In addition, the training provided will enable them to efficiently empty conventional toilets. It
seems that it would take little to make the business working.
Another important resource is the contact with the other important SafiSan stakeholders, such as the
SafiSan Artisan, the PHO, etc. They will ensure access to potential clients, demand creation of
improved sanitation and (free) promotion of the sanitation services.
Key Activities
Here, the limit is the imagination of the entrepreneur. All starts with the provision of emptying services
for SafiSan toilets. The service portfolio should be enhanced to emptying services for other improved
toilets, professional cleaning services, composting, and promoting of SafiSan toilets. However, the
product range can be enhanced almost without limits.
Key Partnerships
In terms of promotion of services and identifying potential customers, partnerships with the WSP, the
PHO and SafiSan Artisans should be created. Service promotion can be as well very effective through
community operating institutions (e.g. churches, mosques, schools, youth and/or women groups).
Cost Structure
The fixed costs for the SafiSan Sanitation Team are expected to be limited. An office and/or warehouse
may be needed in order to store the equipment (SaniGo) safely. Variable costs mainly occur on
cleaning and maintenance products. They vary proportionally with the number of customers.
It does not need much to start the business as a SafiSan Sanitation Team; basically it could start with
one person. An effective service provision will immediately result in huge business growing potential.
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2.4
The DTF Operator Business Model
Another potential business opportunity within a SafiSan project is the operation of a decentralized
treatment facility. Several different scenarios can be imagined:



The DTF is run by a private operator against an operation fee for the WSP (with a lease
agreement with the WSP/County Government)
The WSP fully operates the DTF within its mandates of providing water and sanitation services
on behalf of the County Government
A private actor builds, operates and transfers (BOT) or follows another common privatesector-participation (PSP) model in agreement with the respective County Government
2.4.1 Private Operator
The idea of this concept follows the operator concept of water kiosks adopted under the Urban
Projects Concept (UPC) approach. The WSP/County Government is the owner of the infrastructure
and the operation is outsourced to a single person or a group of people. This concept has been
extensively applied for with the operation of water kiosks and Public Sanitation Facilities (PSF). The
asset ownership has to be looked on very well and agreed with the respective County Government. In
the past the Water Services Boards (WSB) did not fulfil their role as asset owners (reinvestment to
improve).
The operation of a DTF requires a high level of understanding of the sanitation treatment process. This
is different to the operation of the PSF or water kiosks where the operator is a pure service deliverer.
Even in terms of business understanding, the operation of the DTF requires more professional
knowledge in order to operate it profitably (total cost recovery).
The risks of a poorly operated DTF are as high as poorly operated Waste Water Treatment Plants
(WWTP). It may result in direct health risks for the operator and the community. Therefore, the
operation of a DTF should only be done by skilled operators trained in WWTP operation and
maintenance. The overall responsibility remains with the WSP and the County Government. They have
to ensure that the private operator is efficient and acts within the law.
2.4.2 WSP operated DTF
Another model looks at the incorporation of the DTF operation into the WSPs responsibilities and
tasks. The WSPs are the implementing bodies of the SafiSan projects. They manage the social
marketing, train the artisans, certify the sanitation teams, and manage the construction of the DTFs
and so on. It is prudent to give them the responsibility of the operation of the DTF considering that
this is their constitutional mandate delegated from the County Governments. In addition, many WSPs
have skilled personnel with experience in operation and maintenance of WWTP. This option would
allow the DTF to be operated within the legal framework of the water sector in Kenya.
UBSUP is promoting the establishment of sanitation units within the WSPs. Many WSPs already
operate WWTPs or other sanitation infrastructures. They have therefore a certain level of skills and
knowledge. This is a good base for enhancing capacities on the operation and maintenance of a DTF.
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Furthermore, the WSP/County Government are responsible for water, sewerage services and
sanitation. The water sector has the mandate of sanitation management as per Executive Order No. 2
of 2013.
A business model with the WSP operating the DTF would look at a team of WSP employees managing
each DTF. The operation and maintenance costs would be recovered through the “sanitation-shilling”
approach and dumping fees (which is already been charged by WSPs at WWTP). UBSUP is developing
a financing concept which allows WSPs to subsidies the operation of DTFs (including a small financial
incentive for sanitation teams) through the introduction of a sanitation-shilling to the water bill. This
concept follows common practices from developed countries where sanitation service charges are
added to the water bill of any client connected to the water supply systems or sewer network.
2.4.3 Private Sector Participation (PSP) models for DTF
The bandwidth of potential PSP models for (large-scale) wastewater treatment facilities is wide.
Concepts such as Build-Operate-Transfer (BOT) could be applied for the SafiSan concept as well. It
could be imagined that a private company may build for example 5 DTFs in the service area of a WSP
and then operate them for a specific time period. After that, they would be transferred to the WSP.
Although, this model could have a lot of potential, for the time being it seems to be too complicated
to be adopted for the SafiSan approach. After sufficient experience with the operation of DTFs have
been gained, this model could be considered. The establishment of strong and operational water
departments at the county levels would also enhance sustainability and further sanitation investment
after the end of the UBSUP programme. The private sector has to work closely with the County
Government for the success of such PSP measures.
2.4.4 The Proposed DTF Operation Business Model
The constructions of DTFs are ongoing in the three WSPs. So far, none has been completed and nor
has any WSP based experience in operation been gained. Therefore, it is recommended at this stage
to apply a business model where the WSP is in charge of the operation of the DTF. The risk would be
high to consider a private operator initially. Some may focus on income generating activities than on
the proper operation of the DTF. As the DTF is up-scaling, initiatives could be looked into of getting
the private sector and/or private operators involved.
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Value Propositions
Customer Segments






Sanitation Teams
Exhauster Trucks
Directly connected
households
Farmers

Delivery point for
toilet waste
Treating sewerage
Composting
Channels



WSP
Social Animators
B2B concept
Customer
Relationships

Personal customer
relationship
Cost Structure


Revenue Streams
The DTF Operator
Operational costs
Payment to
Sanitation Teams



Sanitation Shilling
Exhauster fees
Sale of composted
material
Key Partnerships





WSP
Sanitation Teams
Exhauster Trucks
Private
Households
PHO
Key Resources
Key Activities


Accepting and treating
toilet waste
Composting



Treatment infrastructure
Composting elements
Treatment knowledge
Figure 3 - The SafiSan DTF Business Model
The details of the business model with the WSP in the responsibility are as follows:
Customer Segments
A DTF would serve several different customers:





Sanitation Teams
Exhauster Trucks
Directly connected households
Collectors dumping organic waste (e.g. market waste) if composting is profitable
Farmers
Each customer follows a different pricing mechanism. In actual facts, it is foreseen that the DTF
operator can pay a small amount to the sanitation team each time they dump a SaniGo load. Exhauster
trucks and directly connected households would be billed while organic waste collector may be
allowed to dump the waste free of charge (until a certain quantity has been reached).
Value Propositions
The current sanitation service situation in low-income areas in Kenya is poor. Manual emptier and
exhauster trucks are offering their services to households. Some dump the content of the toilets in
none designated areas (manholes, storm drainages, forests, rivers, streams, etc.) due inadequate
designated proper disposal points within an acceptable distance from the clients. In some areas,
disposal points (mainly WWTPs or designated manholes) are totally lacking, making the risk of illegal
dumping high.
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Exhauster trucks are willing to pay for dumping the content of their trucks if the collection point is
within an acceptable distance and has a good accessibility throughout the year (not weather prone).
The UBSUP Study showed in addition that households are willing to pay for improved sanitation
services. In general, there is high demand for improved sanitation services for dwellers and private
operators living and/or working in low-income areas.
Following the proposed business model for the Sanitation Team and the activities implemented as
part of the SafiSan project, there will be high demand for collection points and decentralized
treatment facilities located in or close to the SafiSan target areas.
Channels
The social marketing of the SafiSan project will raise the awareness of tenants and landlords on the
need of improved sanitation and the public health requirements. In addition, it will train private
entrepreneurs to deliver services related to sanitation. The operation of the DTF is mainly following a
B2B concept (business to business) since the main client will be sanitation teams, private and WSP
exhauster trucks. Therefore, the marketing of the DTF services will focus on those sanitation actors.
Customer Relationships
A personal customer relationship will be needed since the DTF operator will have to monitor the
material which will be dumped. Customer who will be connected via a pipe to the DTF will have more
like an automated relationship. The connection activity will be through personal interactions. After
that, the service delivery is automated and the payment will be regularly based on monthly bills (from
the WSP).
Revenue Streams
The operation of a DTF may allow several different revenue streams. The core stream (and the reason
why a DTF has been constructed at that specific place) is the collection of toilet waste. Not every
collection activity, however, will contribute to the revenue. In actual fact, the proposed business
model is seeing the collection of toilet waste from the SafiSan Sanitation Teams as a cost since they
would be paid some token money for the disposal of the toilet waste at the DTF.
When talking about the revenue streams, one cannot look at the DTF as an independent entity. Since
the operation of the DTF is subsidized through the proposed “Sanitation Shilling” which will be added
to the water bill, the main revenue stream does not directly reach the DTF.
Other revenue streams, however, may be handled directly at the DTF location. Disposal services for
exhauster trucks will be charged (and paid) at the DTF facility. It is assumed that the exhauster trucks
are willing to pay for the disposal since the distance between collection and potential disposal site has
been reduced and as such reduces their operation costs.
Another potential revenue stream which needs further investigations is the sale of soil conditioner or
similar products created out of the treated toilet waste at the DTF. A lot of research is going on
internationally to close the sanitation loop through reuse of human waste. The DTFs designed under
the UBSUP project try to incorporate those value additions; however, no practical experience has been
gained under UBSUP so far.
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An independently operated DTF would look at additional income generating activities: selling products
and services which satisfy the demand of the customers of the DTF and people living around. Since
the DTFs may produce bio gas, an operator could try to sell this product to people living in short
distance to the DTF.
There are plenty of other potential business ideas which very much depend on the local setup of each
DTF. In general, however, UBSUP tries to make the business model sustainable with only focusing on
the core services. As the project is up-scaled more experiences will be gained on the incorporation of
additional income generating services and products.
Key Resources
The key resource of the DTF under UBSUP is the existence of the infrastructure. Since the construction
is catered for by the project, the business model does not need to consider the recovery of the
investment costs as such. Expenses for operation and maintenance, however, need to be covered by
the business model.
Another key resource is the political empowerment of the service delivery. WSPs will be identified as
THE public service provider for water and sanitation on behalf of the County Governments.
Further key resources include the technical capacity of the County Government, the WSP and the
already existing customer base. Especially for the subsidized DTF operation’s approach, an existing
(large) customer base from the water side is of utmost importance.
Key Activities
The key activity of the DTF business model is to solve the problem of sanitation for people living in
low-income areas at household level. There are currently roughly 8 million people living in urban slums
in Kenya. All of them are entitled to improved sanitation as per the Constitution of Kenya 2010. Some
of them have improved toilets; many use dilapidated or run-down toilets. UBSUP dealing with this
problem through the provision of subsidy for improving toilets and the development of appropriate
sludge management systems.
For the DTF business model it is important to have this in mind. It shows that the DTF business model
will only work if the other components are as well in place. A DTF, for example, may not be
economically sustainable (even with the subsidy approach) if no content from (SafiSan) toilets are
disposed at the facility. The same applies for the construction of the toilets. A project with a high
number of constructed SafiSan toilets but no DTF nor similar treatment facility, is very likely to fail
(and even cause health risks) when the toilets fill up.
Key Partnerships
The sustainability of the DTF is depending on the performance of several partners. The SafiSan
Sanitation Teams, for example, are crucial for the success of the DTF business model. Although, the
current approach foresees the payment of a token amount to the SafiSan Sanitation Team their
cooperation with the DTF is crucial. Since the water customers of the WSP will cater through the
Sanitation Shilling for the operational costs of the DTF, they will only agree to this additional levy if
the quality of the provided emptying service is noted. Customers may refuse (although theoretically
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they cannot) to pay for sanitation if they do not feel an improvement in public health or environmental
treatment of their habitat. The political pressure will augment when the public is supposed to pay for
a service which is not delivered.
Other key partnerships include the cooperation with the exhauster truck operators since they are an
interesting customer segment of the DTF. Furthermore, all relevant stakeholders who help to sensitize
the public on the need for improved sanitation and its related costs are crucial. It can be assumed that
the WSPs are already experienced in dealing with the public.
Cost Structure
The operation of a DTF incurs several different cost items. The main ones are personnel costs, energy
costs, spare parts & consumables, depreciation and laboratory expenses. It has been assessed that
the operation of a DTF designed for 5,000 people will approximately incur yearly costs slightly less
than 1 million KSh.
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3. UBSUP Business Plan Templates
The idea of this chapter is to help transforming the business models presented before into concrete
business ventures. They should help entrepreneurs interested in participating in the SafiSan
programme to prepare their business plans by adapting the templates provided herewith.
3.1
The SafiSan Artisan Business Plan Template
The SafiSan Artisan business plan template should help individual artisans to specialize themselves in
the construction of SafiSan toilets and other related sanitation infrastructure. The programme has an
interest in creating a fostering environment which motivates individuals with an entrepreneurial spirit
to start business ventures focusing on sanitation service delivery.
3.1.1 Company Description
The section on company description is describing a potential setup of a SafiSan Artisan company.
Ownership
Ideally, an individual or a small group of artisans decide to create a company providing the services.
The knowledge and experience of providing artisan services would be crucial in the SafiSan setting.
Theoretically, a background in construction is not necessarily needed. It, however, would make the
establishment of the business cheaper if the knowledge is available since otherwise it has to be
procured externally (through employing an artisan).
Having the current setting within low-income areas in Kenya in mind, most artisans work as a oneman show. This setup is seen as the starting point for this business plan.
Costs & Financial Requirements
The business idea of the SafiSan Artisan Company is providing specialized construction services of
SafiSan toilets. Since it is assumed that the artisan already has (basic) knowledge on construction
works, the financial requirements are limited. Ideally, an artisan who is interested in becoming an
expert for SafiSan infrastructures already operates his own (small) artisan business within the project
area. In this case, the financial start-up requirements would relatively low since it would just mean a
shift in focus of the business.
Company Location and Facilities
For starting the SafiSan Artisan business a company premises is not needed as such. Since the actual
work will be done at the premises of the customers and marketing can be done through door-to-door,
the renting of an office can be avoided at the initial phase. During the first year, however, it would be
recommendable to start renting an office (if the financials do allow). This office (or workshop) should
be located within the area of the potential areas (meaning the project area of SafiSan).
Apart of a marketing tool, having a well branded workshop may give the opportunity for the
entrepreneur to sell additional products and services. At one point, it could be imagine that the SafiSan
Artisan becomes an official distributor of SafiSan toilets which allows the customer to apply for the
toilet at the artisan’s workshop.
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3.1.2 Products & Services
The portfolio of products and services offered should change and enhance with time. Depending on
the size and available assets at the start-up it may expand from offering purely construction services
for the SafiSan toilet to constructing more sophisticated sanitation infrastructures such as septic tanks,
sewer lines, or even decentralized treatment facilities (or at least parts of them).
Description
The core product is a high-quality SafiSan toilet following exactly the provided technical drawings and
BOQs and all its features such as hand-washing facilities and mainstreaming posters. As a result of the
ongoing low-income areas’ upgrading in Kenya there may be more construction works related to
sanitation coming up. Those projects would be the work the SafiSan Artisan Company should try to
focus on.
Competitive Comparison
In theory, a SafiSan toilet can be constructed by anybody. It has, however, to pass certain quality
control. The quality of the construction purely depends on the experience, knowledge,
professionalism and material used by the artisan.
It can be assumed that an artisan who has already constructed for example 100 SafiSan toilets may be
able to provide a higher quality within a shorter construction time. This is the competitive advantage
of the SafiSan Artisan Company which is specialized in those toilets. In addition, having a certification
from the WSP strengthens the trust of the customer in the expected quality.
Furthermore, a company which continuously constructs SafiSan toilets may benefit from economies
of scale. They will continuously require the same construction material from a number of selected
suppliers. It can be assumed that with time they will be able to procure the material at a cheaper price
than an individual artisan. This will enable the company to either increase profits per toilet or reduce
the selling price.
Marketing
The initial marketing will look at simple and cost-efficient techniques. The most efficient marketing
technique will be through the construction of high-quality toilets. Since the SafiSan concept will be
new to many areas in Kenya, many potential customers will ask the WSP, the Social Animators or
existing SafiSan customer on recommendation for artisans.
In addition, flyers could be distributed at the WSP office and within the target area. In general, a close
contact with the WSP and the Social Animators should be maintained.
Technology
The technology of the SafiSan toilet is given by the UBSUP programme. However, if an artisan (or
somebody else) proposes an improved (more cost efficient) technology and/or adaptation which
covers the key characteristics of the SafiSan toilet, there should be no reason of not making that
specific model eligible for subsidy.
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This gives a great opportunity to an innovative company to customized the SafiSan toilet and basically
promoting their own product. This would shift the demand from a technology to a brand. In order to
customize the SafiSan toilet, a close cooperation with potential customers is needed. Since the SafiSan
toilet is trying to cover the national needs, there may actually be a good opportunity in tailor-made
localized toilet designs which still maintains the core features of the SafiSan toilet.
In principle, the SafiSan product range can be extended to other relevant sanitation infrastructures.
Although, SafiSan is a registered brand, the owner of SafiSan (the Water Services Trust Fund) could be
approached with, for example, a SafiSan septic tank which reflects the needs of the SafiSan DTFs.
Future Products and Services
The SafiSan brand can cover a wide range of relevant products and services. Apart of construction
services, emptying service and treatment are already part of the SafiSan concept. Any company
starting to cover one step of the SafiSan sanitation chain could theoretically grow into a SafiSan
Sanitation Agent Company which covers the other part of the sanitation chain, providing an overall
sanitation solution following the SafiSan concept.
3.1.3 Market Analysis
The market analysis for each potential SafiSan Artisan Company depends on the local circumstances.
The UBSUP sanitation study and the experience of the pilot projects highlight the potential for private
sector involvement in sanitation service delivery.
In order to make the SafiSan Artisan Company successful a certain level of potential clients is needed.
In a town like Embu where within the first 6 months of the project 1,200 toilets have been constructed
is a higher potential for this business model than in a small town with limited number of potential
clients.
Each potential entrepreneur needs to do a detailed market assessment. As well the proper timing is
crucial for the success of the business. The implementation time of a SafiSan toilet is limited.
Depending on local circumstance, a project may last 6 months or 20 months or even longer. The
project duration does not necessarily define the potential lifetime of the company but rather sets the
maximum time available for turning customers from one-time to continuous clients.
Market Segmentation
The initial market for SafiSan toilets is very much limited to private households. The UBSUP project is
(currently) not supporting schools or other public institutions. However, the client portfolio of the
SafiSan Artisan Company does not need to limit itself to private households. The company could offer
the SafiSan toilet (without subsidy payments) to public clients or even to households which are not
within the project area.
Target Market Strategy
There is currently a high demand for improved sanitation in low-income areas in Kenya. The results of
the pilot implementation showed that within a six months’ time more than 400 toilets have been sold
within three areas. The number increased to more than 2,000 toilets within the following six months.
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According to MajiData a total of 4.2 million people living in urban low-income areas in Kenya do not
use an improved toilet. The potential of selling affordable toilets has further been established during
the UBSUP Study on sanitation in 11 different towns in Kenya.
All Pilots
Nakuru WSP
Embu WSP
Oloolaiser WSP
No. of toilets
2 000
1 500
1 000
500
0
1 5 9 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46
Weeks
Figure 4 - Sale of SafiSan Toilets during Pilot Phase
The infrastructures promoted by the SafiSan Artisan Company will be able to satisfy this demand. The
drawings and technologies are promoted and tested within the UBSUP programme.
Market Needs
The SafiSan Project promotes subsidized toilets in urban low-income areas. Those toilets follow
defined design plans and bills of quantities. For the construction of these toilets the services of artisan
are needed. The artisans have been trained beforehand on the specifics of the design of the toilets.
Therefore, the SafiSan project has the need of artisan services to construct the SafiSan toilets. The
need, however, depends very much on the demand of house owners or landlords in improved toilets.
For the SafiSan Artisan Company this is an interesting setting since the SafiSan project will cover the
costs and risks of market penetration and marketing. The company may enter a market with
unsatisfied demand for SafiSan toilets.
There are competitors but it can be expected that there will be no or only very few artisans who will
specialize on SafiSan toilets. A specialized company offering better quality of work and reduced
construction time will attract more customers than generalized artisans.
Market Trends
Current trends in the sanitation business are greatly favouring the start-up of a SafiSan Artisan
Company. The SafiSan project is starting the scaling-up phase and it can be assumed that a lot of
demand for improved sanitation can be generated. The project tries to reach a minimum of 600,000
people with improved sanitation through construction of SafiSan toilet facilities and provision of
services.
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The scaling-up phase is a perfect opportunity to start the business in order to position itself as a strong
player in the market. It gives great opportunities for growth.
Market Growth
The scaling-up of SafiSan projects works in phases. In the beginning, a total of 200 subsidized toilets
per service area are given to a WSP which handed in a successful proposal. Experiences from the pilot
phase shows that even more than 1,200 toilets may be constructed in one area. This gives great
opportunities for growth.
Since the project awarding will be done as well in phases (actually in different calls) a SafiSan Artisan
Company could start in one project area and expand to neighbouring towns in case their WSPs are
successful.
At one point, however, the growth of the SafiSan toilet market may stabilize or decline since there
may not be more subsidies offered for the construction of the toilet. Nevertheless, the brand SafiSan
may be well established at that point that even without the subsidy people will opt for the SafiSan
toilet.
Competition and Buying Patterns
In order to establish the company as an important player in the market, it has to gain an overall
competitive advantage. The following are seen as potential competitive advantages:





Quality of works: due to the experience and specialization in SafiSan toilets, the construction
will be of high quality;
Price: due to the bigger customer base the company may be able to offer a slightly lower price
than the competition;
Speed: due to the experience the company may be able to construct the toilets much quicker
than the competition;
One-stop-shop: the company will be able to offer the construction of all kinds of sanitation
infrastructures to its client. For instance, a customer may be interested in a SafiSan toilet
attached to a new shower. The company would be able to offer these modifications;
Mouth-to-mouth propaganda: due to the good services offered, the company will gain more
clients than other since the product is new in the market.
3.1.4 Strategy & Implementation
The primary focus of the strategy will be to increase sales and profitability. In addition, it is important
to identify potential areas for business expansion in order to achieve a permanent business
relationship with customers.
Value Proposition
The value proposition is two-fold.

Value proposition for private clients: the company would offer services that are cost effective
and of high quality of work.
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
Value proposition for WSPs and SafiSan: the company closes the gap of construction services
for SafiSan toilets. Therefore, it helps the SafiSan project and the WSP to quicker achieve their
targets and to further promote the SafiSan project. Customers are more likely to opt for
SafiSan if the promoted infrastructures are of good quality, affordable & effective.
Competitive Edge
The competitive edges are summarized as follows:




Cost: the price of the SafiSan toilet may be cheaper than from competitors
Improved living standard: improved sanitation improves the living standard of people having
access to it.
One partner for sanitation: customers will have one partner for everything related to
sanitation infrastructure.
Customization: customers can request tailor-made sanitation infrastructure.
Marketing Strategy
The marketing strategy is the core of the main strategy. It could focus on the following aspects:
1. Emphasize high quality services
2. Build a relationship oriented business
3. Focus on landlords and house owners as key initial market.
The marketing activities will be complemented by the social animation works done through the
SafiSan project.
Pricing Strategy
The cheapest currently available SafiSan toilet goes for approximately 34,000 KSh. This include
material and labour. The labour cost ranges from 7,000 to 10,000 KSh.
The pilot project implementation revealed that customers are willing to pay that price. They do not
necessarily go for the cheapest option, they rather spend some additional money on beautification.
The standard toilet design, for example, does not foresee a lot of paintwork. In actual facts, only two
stripes are painted on the toilet. Many customers, however, spend extra money on a fully painted
toilet.
This means for the pricing strategy of the SafiSan Artisan Company that its main competitive
advantage does not need to be the price. The good quality construction should convince most
customers to opt for the company services.
Sales Strategy
The sales strategy looks at the promotion of the company’s service. Since the technology is available
to other artisans, the sale strategy has to look at the competitive advantages of the SafiSan Artisan
Company in comparison to general artisans.
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The competitive advantage only comes into place after the company has constructed a number of
high quality SafiSan toilets. Therefore, the sales strategy may look at a special price offer for the first
10 clients in order to establish a customer base.
In the course of the development of the company it will be important to establish the demand for
additional (SafiSan) sanitation infrastructures. The strategy should look at developing a regular
customer database rather than focussing on a one-time sale. This can be achieved through promoting
maintenance services or the construction of other sanitation infrastructure. The marketing should
look at positioning the company as THE key partner in terms of construction of sanitation
infrastructures.
Sales Forecast
The sales forecast strongly depends on when the SafiSan Artisan Company becomes operational.
Ideally, the preparation of the company has been started during the proposal preparation of the WSP
to WSTF. Therefore, it would be important (as well as for future business development) to actively
support the proposal preparation of the WSP. As soon as the advert from WSTF for a SafiSan Call for
Proposal is published, the entrepreneur should approach the WSP to support them in their bid. This
can be a win-win situation since the proposal to WSTF will gain some additional points if the WSP can
show that there are already service providers lined up for the implementation of a SafiSan project.
This applies as well (or even more) for the SafiSan Sanitation Teams.
In case the SafiSan Artisan Company manages to use the time during proposal preparation and
evaluation to establish a business relationship with the WSP and at the time of the award is fully
operational, a sales forecast as shown below could be realistic.
Figure 5 - Projected Sale for SafiSan Artisan Company
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For the graph above, the following scenario was adapted: It can be assumed that the market share at
the beginning of the SafiSan project is close to 100% since the SafiSan technology/programme may be
new to the competition. Therefore, it will take some time before they can offer the same service. As
soon as more entrepreneurs (artisans) offer the same services, the market share quickly drops from
100% to approximately 30% within the first 3-4 months of the project implementation and increases
then slowly up to 50% since some artisans may not find the SafiSan business lucrative and customers
may opt for the strongest player within the market. These percentages strongly depends on the
performance and capacities of the SafiSan Artisan Company. A stronger as well as weaker
development is possible. When preparing a business model for a concrete opportunity, several
scenarios should be developed. The demand figures are based on the pilot implementation in three
WSPs in Kenya.
Based on the figures above, the following sales forecast is estimated with a selling price of 34,000 KSh
per toilet.
Figure 6 - Projected Turnover for SafiSan Artisan Company
After roughly 12 months, the company would have generated an accumulated turnover of
approximately 10 million KSh.
3.1.5 Management Summary
Every company needs a mind behind the business. The SafiSan Artisan Company would need an
experienced artisan with an entrepreneurial spirit. Being experienced in (small-scale) construction
works is not a must as such but helps to keep the investment costs low since otherwise, the experience
needed to construct a SafiSan toilet will have to be procured and this will affect the figures of the
business.
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Management Team
The SafiSan Artisan Company does not need a team at the start. The company can start with a single
person being in charge of the operation and doing the initial constructions. The number of employees
need to grow, however, quickly. Demand for toilets will be low in the first 1 to 3 months. Then,
however, after the first ones received their subsidies from the WSP the demand will explode. There,
the company should be able to handle all construction jobs, otherwise it will lose them to the
competition.
Looking at the absolute weekly sales figures based on the above mentioned criteria will help to
estimate the number of technical support needed in order to keep the construction time of the toilet
at a minimum.
In general, it can be estimated that the construction of 1 toilet needs about 5 days. There can be a
gain of time when an artisan constructs two toilets at the same time. The overall construction time
would be 8 days instead of 10 days. These figures are used as the basis for the calculation of additional
staff needed.
In order to keep the SafiSan Artisan Company lean, it is recommended to hire daily labourers for the
construction of the toilet. Those workers are paid a fixed amount per day, they need, however,
supervision from the artisan. This means, that at one point, the company has to hire additional artisans
for supervision.
Based on the figures from the pilot zone combined with the market share, the weekly workload for
the company stays normally between 15 and 20 toilets. Consequently, the number of workers needed
can be calculated and are shown below.
Figure 7 - Projected Sale and Staff Need for SafiSan Artisan Company
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As a rule of thumb, the number of workers needed is slightly lower than the number of toilets under
construction per week.
Management Team Gaps
With a certain number of constructions ongoing, the company needs to hire additional supervisory
staff (artisans). At the beginning, this can be done on a daily basis; at one point, however, additional
staff should be permanently employed.
Personnel Plan
The following table gives an overview on the costs related to the need for personnel.
Table 1 - Projected Costs and Need for External Personnel for SafiSan Artisan Company
Month
No. of toilets
(absolute)
No. of Daily Worker Expected Personnel Expected Sale (KSh)
needed (up to)
Costs (KSh)
1
0
0
0
0
2
0
0
0
0
3
16
14
21,778
555,333
4
8
7
10,444
266,333
5
6
5
8,400
214,200
6
22
18
29,333
748,000
7
27
22
35,467
904,400
8
53
44
70,889
1,807,667
9
54
45
72,356
1,845,067
10
53
44
70,489
1,797,467
11
32
27
42,889
1,093,667
12
14
12
19,111
946,333
Total
286
246
381,156
9,719,467
The table does not include the fixed personnel costs such as salaries for the owner and other additional
artisans. It just shows the personnel costs related to sale of toilets. The costs for external staff relates
to 3.92% of the sale.
3.1.6 Financial Plan
The business plan provided here does not need much start-up funding. It is more about preparing all
relevant activities (such as networking with relevant authorities) before a SafiSan project starts. With
the social marketing of a SafiSan project, demand for construction activities will come up immediately.
The main asset of the business would be the knowledge of constructing SafiSan toilets. As a result, the
business concept presented would be a great opportunity for artisans who are already working in a
potential SafiSan project area. They already have their customer base, suppliers and marketing
channels well established.
Simplified Profit and Loss (P&L)
The simplified profit and loss statement is based on the numbers presented above. The P&L statement
is an exemplary one. It needs to be adjusted according to individual and local circumstances.
Nevertheless, information from the pilot phase and from interviews with relevant stakeholders in the
field are considered.
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Table 2 - Simplified Profit and Loss (P&L) Statement for SafiSan Artisan Company
1st
2nd
3rd
4th
Quarter Quarter
Quarter
Quarter
1
Sales
555,333 1,228,533 4,557,133 3,378,467
2
Direct Cost of Sales
462,778 1,023,778 3,797,611 2,815,389
3
Gross Margin
92,556
204,756
759,522
563,078
4
Gross Margin %
16.67%
16.67%
16.67%
16.67%
5
Payroll
30,000
30,000
90,000
60,000
6
Sales and Marketing Expenses
3,000
3,000
3,000
3,000
7
Rent
0
0
3,000
3,000
8
Utilities
0
0
500
500
9
Other
500
500
1,000
1,000
10 Total Operating Expenses
33,500
33,500
97,500
67,500
11 Profit before interest and taxes
59,056
171,256
662,022
495,578
Cost factors such as taxes and depreciation have not been considered at this stage.
ID
Item
Total
9,719,467
8,099,556
1,619,911
16.67%
210,000
12,000
6,000
1,000
3,000
232,000
1,387,911
Furthermore, the following assumptions are underlying the calculation:
Table 3 - Assumption for SafiSan Artisan Company P&L
ID
1
Item
Sales
2
Direct Cost of Sales
4
Gross Margin %
5
Payroll
6
Sales and Marketing Expenses
7
Rent
11
Profit before interest and taxes
Assumption
Based on real figures from pilot phase and assumptions
described earlier in this document (e.g. market share)
Includes cost for material and daily workers. An
adjustment of the material costs has not been included.
This is another cost saving measure when buying the
material in bulk.
Since material & personnel cost and selling price are
assumed to be rather fixed, the ratio does not change
between the quarters. In reality. The gross margin rate is
expected to grow within time.
The salary for the owner of the company was estimated at
30,000 KSh per month. In the third quarter the company
needs support for supervision of the toilet constructions.
The same cost value has been used for the additional
support.
Since marketing is mainly done through the SafiSan
project, the cost have been kept rather little
In the beginning, the company does not necessarily need
an office. At a later stage, an office or warehouse in the
project areas would be recommendable.
No taxes nor depreciation have been deducted from the
profit.
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3.2
The SafiSan Sanitation Team Business Plan Template
This chapter describes a business model template for the provision of emptying services within the
SafiSan project. It targets already existing emptiers.
3.2.1 Company Description
The core business of the SafiSan Sanitation Team is to provide emptying services for SafiSan toilets. In
addition, they would be able to provide other related sanitation services such as blockage removal or
professional cleaning services.
Ownership
The company would start with as a one-man show with additional external support if needed.
Currently, most emptying service providers are organized in groups. Those groups are offering all kind
of services not only looking at sanitation. Since the potential market of pure sanitation services might
be very limited, those groups need additional income stream to provide for each member.
For the business plan of the Sanitation Team the number of permanent staff has been kept at an
absolute minimum in order to keep fix costs low without hampering operation.
Cost & Financial Requirements
In order to be operational, the SafiSan Sanitation Team needs a set of material and tools. The UBSUP
programme will provide to all Sanitation Team the option of buying the SafiSan equipment (safety
tools, SaniGO, emptying tools) at a subsidized price. The price has not yet been fixed.
Company Location and Facilities
The Sanitation Team does not need an office as such. They may, however, need a place for storing the
equipment. In case there is a market for composting, then space (and maybe an office) would be
needed.
3.2.2 Products & Services
The portfolio of services may change with time. At the beginning, all services related to sanitation
(emptying, cleaning, etc.) would be offered. There might be a need to identify additional sanitation
related services in order to increase revenue. Since the SafiSan Sanitation Teams will mainly look at
the SafiSan Urine Diversion Dehydration Toilets (UDDT), the market potential is easily calculated and
very much depending on other stakeholders. If artisans do not construct SafiSan UDDT then the
Sanitation Team will have no clients.
Description
The emptying service for SafiSan UDDTs is relatively clean and straight forward. It depends, however,
always on the use of the toilet by the client. If diapers and other items have been thrown into the
toilet, the emptying (and treatment) will be more complicated. In such a case, the emptying may take
more time, has more health hazards, is unpleasant and will be more expensive for the customer. In
order to prevent this, a lot of sensitisation and training on the use of the toilet is needed.
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Competitive Comparison
Entering the profession of a manual emptier is relatively easy. Basically anybody can do it who does
not mind working with human faeces. Normally, people who do emptying jobs do not have the choice.
They have to earn some money in order to survive. That makes the market very difficult for a
professional Sanitation Team. If the prices charged by the Sanitation Team for a proper emptying of
the toilet is too high, people will opt for illegal/informal emptiers. They do not necessary bother about
the difficulties and risks those informal emptiers are facing; most of the clients want the toilet to be
emptied at a cheap price. Even the dumping of the toilet content is of little concern to the clients.
The competitive comparison between a legal and formalized Sanitation Team and potential illegal
competitors is not very promising. It remains to be seen if customers are willing to pay a fair price for
professional and legal emptying or rather try to get the best bargain for this activity.
Marketing
The Sanitation Teams will profit from the marketing done directly through the SafiSan project. The
Sanitation Teams should team up with the SafiSan Artisan Companies in order to inform potential
clients about their services already at the stage of toilet construction.
Technology
There is not much technology involved in the emptying bit. The SafiSan Sanitation Teams will have
special designed tools for the SafiSan toilets but in theory the chambers of the UDDT can be emptied
with a shovel and a bucket.
Future Products and Services
In order to make the business sustainable, the Sanitation Teams need to think early about how to
expand their product portfolio. The idea of composting and selling soil conditioner seems to be an
interesting approach. It requires, however, land, investments and a certain level of knowledge to be
able to operate a composting business. Other ideas rotate around selling sanitation hardware or
operating public toilets where feasible and available.
The dilemma of the SafiSan Sanitation Teams is that in most cases (due to the limited number of
UDDTs) they are in need to diversify their business which then bears the risk of focussing on more
lucrative income generating activities than on toilet emptying. This would be a development which
would not be wished for within the UBSUP programme.
3.2.3 Market Analysis
The potential of the market depends very much on local circumstances. During the pilot phase of
UBSUP around 250 SafiSan UDDTs have been sold within the service areas of Oloolaiser WSP. In
Nakuru only 7 UDDTS and in Embu a similar small number have been sold. This makes it basically
impossible to design a business plan for Nakuru and Embu since the potential income is just too little.
For Oloolaiser there might be a potential market for UDDT emptying services. The question, however,
remains whether during the up-scaling there will be more cases like Oloolaiser or rather Nakuru and
Embu?
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Market Segmentation
The market is very limited to households with dry toilets (UDDTs). They are relatively common in rural
areas, not necessary in urban areas. UBSUP, however, tries to promote the UDDT and as such create
more business opportunities.
Target Market Strategy
Why should a potential client opt for the services of the Sanitation Team if informal workers could
offer the same service at maybe a cheaper price?
The SafiSan Sanitation Team will promote their services as professional emptying services which are
clean, hazard free and quick. The SafiSan Sanitation Team will be THE partner when it comes to
sanitation related services. Blockage removal (for water-based toilets) and professional cleaning are
just two of the additional services the SafiSan Sanitation Team will provide.
Market Needs, Trends & Growth
The more SafiSan UDDTs are constructed the more demand is generated for emptying services. When
customers have the choice between UDDTs and water-based toilets, most of the people will opt for
the water-based toilets. Only in areas with no water or sewerage systems (which are a lot) people may
be forced to go for the UDDT. Unfortunately, the pilot phase did not give enough data on this
development. Oloolaiser was the only pilot zone where water-based toilets were no option. In
comparison to the other pilot zones, the demand picked up much later and lower than in the other
areas. By today, the target of 200 toilets has been reached (currently there are about 300 UDDTs) but
the high numbers of toilets such as in Nakuru (650) and Embu (1200) has not been achieved.
Therefore, it is difficult to estimate the potential market growth and trends.
Competition and Buying Patterns
Competition is difficult to assess. Due to the high unemployment rates in low-income areas in Kenya
people are looking for any opportunities which enable them to earn some money. Working as an
emptier does not necessarily need a lot of training and/or investment. Although the service delivery
quality is different in theory anybody with a shovel and a bucket could be asked to empty a toilet. This
informal competition does not work according to a business plan or a pricing strategy. Nor are they
allowed to perform this job since potential health risks are linked to this activity if not executed
properly or without the needed equipment. The health risk for emptying UDDTs is very minor if used
properly. In theory, landlords could empty their toilets themselves and apply the content in their
garden, if available.
The buying pattern for this service is reactive. As soon as the client realizes that the toilet is full, the
service is requested and should be provided as soon as possible. Only in very few cases a client would
continuously monitor the space in the toilet chamber and would proactively organize the emptying
service. Therefore, for the company’s strategy it is important to be able to react quickly and to deliver
service within an acceptable time for the client.
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3.2.4 Strategy & Implementation
The Strategy & Implementation part defines the near future of the company’s operation.
Value Proposition
The value proposition is two-fold.



Private Clients: the company offers emptying services to private (and commercial) clients with
a UDDT toilet.
WSP: the company offers emptying services on behalf of the WSP.
Farmers: where applicable, the company offers soil conditioner or fertilizer for (small-scale)
farmers.
Competitive Edge
The competitive edge is looking at the professional provision of emptying services. The key elements
are:



Quality: the company offers high quality emptying services in terms of cleanliness and speed.
One partner: the company would offer different sanitation services to clients and would act
as THE partner in terms of sanitation services.
Composting: the offered soil conditioner and fertilizer are a cheap alternative to chemical
fertilizers available in the market.
Marketing Strategy
The market strategy builds on the SafiSan Social Animators. During their activity of promoting SafiSan
toilets they would inform the public on the availability and costs of professional emptying services
provided by the SafiSan Sanitation Teams.
In addition, mouth-to-mouth propaganda and a close link to the WSP are important additional
marketing channels. At one point, the company would be able to rent an office/shop which would
become the one-stop shop for any sanitation services.
Pricing Strategy
The pricing strategy strongly depends on the different income streams. A Sanitation Team Company
which offers composting may be able to ask for lower emptying fees. A company which only provides
emptying services needs to cover all costs and generate a profit from this activity only.
The service provided must be (way) cheaper than other related services provided by other
entrepreneurs such as exhauster trucks, mechanical emptier, pit latrine dicking, etc.
Sales Strategy
The sales strategy needs a close cooperation with the WSP and SafiSan Artisans. They are the first to
know about new potential clients since they are constructing the infrastructure and providing the
subsidy. Therefore, cooperation models should be prepared with those stakeholders.
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UBSUP Business Models and Business Plans
Clients who opt for a UDDT toilet will be interested in the emptying services provided and they should
be actively approached. Ideally even during the construction or at inauguration of the toilet.
Sales Forecast
The sales forecast depends very much on the local circumstances. Areas with no water and/or sewer
connections, with rocky soil or limited space may generate a much higher demand for UDDT toilets
than other areas where water toilets are applicable.
During the nine months pilot implementation in three different towns, the number of SafiSan UDDT
toilets reached approximately 300 infrastructures out of more than 2,100. Most of those
infrastructure where found in one town due to the non-eligibility of the other toilet technologies.
One UDDT vault should be emptied at least once a year if used properly by maximum 10 people.
Therefore, over a period of one year of operation it should be emptied twice, alternating the vaults.
A sales forecast only for emptying services could look like this:
Figure 8 - Sales Forecast for Sanitation Team Company (Absolute Figures)
In order to estimate the yearly turnover of the Sanitation Team we have to do additional assumptions
to the market share:
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Table 4 - Scenarios for Emptying Sales Forecast
Item
Type
Scenario 1
Scenario 2
Scenario 3
Price per emptying
KSh
1,500
500
1,000
Revenue per dumping at DTF
KSh
100
50
100
Number of toilets
No.
285
285
285
Emptying Cycle
Months
6
6
6
Total emptying market potential per year
No.
570
570
570
The prices used in the table above are drawn from discussions with existing manual emptiers.



Scenario 1: seems to be unrealistic due to the higher price asked for emptying. Customer may
rather opt for informal service delivery.
Scenario 2: seems to be not sustainable from a financial point of view.
Scenario 3: seems to be the most realistic scenario (most cost effective).
Figure 9 - Projected Turnover for SafiSan Sanitation Team
The figure above does not reflect a potential change of the market share. A reasonable pricing should
lead to an increase market share. The adjustment of market shares for each individual scenario
changes the income projected completely. Now, Scenario 3 seems to be the most viable.
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UBSUP Business Models and Business Plans
Figure 10 - Projected Turnover for SafiSan Sanitation Team with Adjusted Market Shares
3.2.5 Management Summary
The mind behind the SafiSan Sanitation Team Company needs to be somebody with an
entrepreneurial spirit. No technical knowledge is needed as such; of course it never harms. The
knowledge of properly emptying the SafiSan UDDT toilets will be provided in trainings through the
SafiSan project.
Management Summary
Again, the assumption is here, that the company starts with one person who may hire casual workers
as per needs basis. The overall size of the company is depending on the potential clients. In general, it
is expected to be rather small.
Management Team Gaps
At one point, the company may think of employing full-time staff to do the emptying. That depends
very much on monthly generated income based on the number of clients.
Personnel Plan
Based on the projections used above for the different scenarios the maximum number of emptying
activities in one month would be 60 with Scenario 2 in month 9. This would mean an average of 3
emptying activities per working day. This is perfectly doable. Only when the number of potential
clients is far beyond 400 than the company may need additional staff to handle all potential
customers.
3.2.6 Financial Plan
This subchapter will provide financial information for different scenarios. In addition, it will try to
establish the minimum number of potential clients to make the business feasible
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UBSUP Business Models and Business Plans
Simplified Profit and Loss (P& L)
Based on the projections above the following simplified P&L statements can be drawn. For all P&L
statements the following assumptions regarding fix costs have been used:
Table 5 – Assumptions Underlying the Simplified Profit and Loss (P&L) Statements
ID
Item
KSh per
month
2
Direct Cost of Sales
400
5
Payroll
30,000
6
Sales and Marketing Expenses
1,000
7
Rent
4,000
8
9
Utilities
Other
Payback for SafiSan
12
Equipment
SCENARIO 1
500
500
500
Description
This is the amount needed to hire external
workers to support during peak time of the
emptying
This is supposed to provide a salary for two staff
at 15,000 KSh each per month
This is basically for airtime
Where applicable, the rent of an office was
estimated at 4,000 per month
This is for water and electricity if applicable
Any other expenses
It has been suggested that the entrepreneur pays
back a (subsidized) amount for the SaniGo, etc.
Table 6 - Simplified Profit and Loss (P&L) Statement for Scenario 1
1st
2nd
3rd
4th
Total
Quarter Quarter
Quarter
Quarter
1
Sales
144,640
68,352
83,136
77,968
374,096
2
Direct Cost of Sales
0
0
0
0
0
3
Gross Margin
144,640
68,352
83,136
77,968
374,096
4
Gross Margin %
100.00%
100.00%
100.00%
100.00%
100.00%
5
Payroll
90,000
90,000
90,000
90,000
360,000
6
Sales and Marketing Expenses
3,000
3,000
3,000
3,000
12,000
7
Rent
0
0
12,000
12,000
24,000
8
Utilities
0
0
1,500
1,500
3,000
9
Other
1,500
1,500
1,500
1,500
6,000
10 Total Operating Expenses
94,500
94,500
108,000
108,000
405,000
11 Profit before interest and taxes
50,140
-26,148
-24,864
-30,032
-30,904
12 Payback for SafiSan Equipment
1500
1500
1500
1500
6,000
13 Profit before taxes
48,640
-27,648
-26,364
-31,532
-36,904
14 Profit Percentage
33.63%
-40.45%
-31.37%
-40.44%
-9.86%
Although in this scenario the highest emptying price is asked it is economically not feasible adopting
the assumptions stated above.
ID
Item
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UBSUP Business Models and Business Plans
SCENARIO 2
Table 7 - Simplified Profit and Loss (P&L) Statement for Scenario 2
ID
Item
1
Sales
2
Direct Cost of Sales
3
Gross Margin
4
Gross Margin %
5
Payroll
6
Sales and Marketing Expenses
7
Rent
8
Utilities
9
Other
10 Total Operating Expenses
11 Profit before interest and taxes
12 Payback for SafiSan Equipment
13 Profit before taxes
14 Profit Percentage
This scenario asked the lowest prices
feasible.
1st
Quarter
74,800
2,000
72,800
97.33%
90,000
3,000
0
0
1,500
94,500
-21,700
1500
-23,200
-31.87%
for emptying
2nd
3rd
4th
Total
Quarter
Quarter
Quarter
60,621
69,828
64,334
269,583
0
0
1,200
3,200
60,621
69,828
63,134
266,383
100.00%
100.00%
98.13%
98.81%
90,000
90,000
90,000
360,000
3,000
3,000
3,000
12,000
0
12,000
12,000
24,000
0
1,500
1,500
3,000
1,500
1,500
1,500
6,000
94,500
108,000
108,000
405,000
-33,879
-38,172
-44,867
-138,618
1500
1500
1500
6,000
-35,379
-39,672
-46,367
-144,618
-58.36%
-58.61%
-73.44%
-54.29%
but due to the high fixed costs it is as well not
SCENARIO 3
Table 8 - Simplified Profit and Loss (P&L) Statement for Scenario 3
1st
2nd
3rd
4th
Total
Quarter Quarter
Quarter
Quarter
1
Sales
134,200
93,170
109,956
101,937
439,263
2
Direct Cost of Sales
1,200
0
0
0
1,200
3
Gross Margin
133,000
93,170
109,956
101,937
438,063
4
Gross Margin %
99.11%
100.00%
100.00%
100.00%
99.73%
5
Payroll
90,000
90,000
90,000
90,000
360,000
6
Sales and Marketing Expenses
3,000
3,000
3,000
3,000
3,000
7
Rent
0
0
12,000
12,000
24,000
8
Utilities
0
0
1,500
1,500
3,000
9
Other
1,500
1,500
1,500
1,500
6,000
10 Total Operating Expenses
94,500
94,500
108,000
108,000
405,000
11 Profit before interest and taxes
38,500
-1,330
1,956
-6,063
33,063
12 Payback for SafiSan Equipment
1500
1500
1500
1500
6,000
13 Profit before taxes
37,000
-2,830
456
-7,563
27,063
14 Profit Percentage
27.82%
-3.04%
0.41%
-7.42%
6.18%
This scenario is feasible in some of the quarters. However, the fixed costs still seem to be too high.
ID
Item
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UBSUP Business Models and Business Plans
Recommended Business Setup
Scenario 3 seems to be the most feasible option for the SafiSan Sanitation Team. However, it still
needs a reduction of the fixed costs. The following model seems to be acceptable based on Scenario
3 assumptions in Table 3.
The following recommendations and assumptions are underlying this model:
Table 9 - Assumptions Underlying the Recommended Business Setup
ID
Item
KSh per
month
Description
The direct costs of sale are expected to increase
2
Direct Cost of Sales
400
due to the reduce number of permanent
employees
The company can only afford one person on the
5
Payroll
15,000
payroll. All additional support needed has to be
externally procured on a needs basis
It is not economically feasible to rent an office
7
Rent
0
under this model
8
Utilities
0
No utility costs occur
9
Other
500
Any other expenses
Payback for SafiSan
It has been suggested that the entrepreneur pays
12
500
Equipment
back a (subsidized) amount for the SaniGo, etc.
The simplified P&L for this business model would look as follows:
Table 10 - Simplified Profit and Loss (P&L) Statement for the Recommended Business Setup
1st
2nd
3rd
4th
Quarter Quarter
Quarter
Quarter
1
Sales
134,200
93,170
109,956
101,937
2
Direct Cost of Sales
1,200
0
0
0
3
Gross Margin
133,000
93,170
109,956
101,937
4
Gross Margin %
99.11%
100.00%
100.00%
100.00%
5
Payroll
45,000
45,000
45,000
45,000
6
Sales and Marketing Expenses
3,000
3,000
3,000
3,000
7
Rent
0
0
0
0
8
Utilities
0
0
0
0
9
Other
1,500
1,500
1,500
1,500
10 Total Operating Expenses
49,500
49,500
49,500
49,500
11 Profit before interest and taxes
83,500
43,670
60,456
52,437
12 Payback for SafiSan Equipment
1500
1500
1500
1500
13 Profit before taxes
82,000
42,170
58,956
50,937
14 Profit Percentage
61.65%
45.26%
53.62%
49.97%
This model seems to be financially viable, however, it strongly depends on a minimum
market size.
ID
Item
Total
439,263
1,200
438,063
99.73%
180,000
12,000
0
0
6,000
198,000
240,063
6,000
234,063
53.43%
potential
The other scenarios may turn feasible if other income streams through composting or other activities
would be added.
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UBSUP Business Models and Business Plans
Financial Feasibility Calculation
The scenarios above are based on a potential market with 285 toilets and 570 emptying activities per
year. The sales figures were calculated through adopting a market share approach. In order to
calculate the minimum number of toilets (and as such emptying activities) needed, the assumptions
used for the P&L calculation of the recommended business set up in Table 9 have been used.
In order to estimate the minimum number of toilets needed one has to define the profit target for the
company. In general terms, a minimum profit should target 15-20%. However, in order to be enduring,
the profit target should actually be closer to 40 and 50%.
The following number of toilets is needed in order to achieve the following profit shares.
Table 11 - Profit Share Calculation
Scenario
Minimum No. of
Annual Profit (KSh)
Profit Share (%)
Toilets
Scenario A
157
36,395
15.06%
Scenario B
168
53,965
20.82%
Scenario C
222
137,425
40.11%
Scenario D
271
212,100
50.83%
In case, the market share approach would not be adapted and a monopoly for the SafiSan Sanitation
Team would be assumed, the minimum number of toilets in order to achieve a 15% profit share would
be 110 UDDTs.
Figure 11 - Profit Share Development in Relation with No. of UDDTs
The analysis shows that a minimum number of 157 SafiSan UDDT toilets are needed in order to make
the business viable for one SafiSan Sanitation Team. There will be (and there already are) SafiSan
projects with less than 157 UDDT toilets. Those toilets need to be emptied. The following approach is
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UBSUP Business Models and Business Plans
recommended in such cases: In cases where the minimum number of UDDTs is not reached, the WSP
should become responsible for the emptying service delivery. The customer would call the WSP and
the WSP would organize the emptying service by coordinating with the Sanitation Team working the
closest to the affected area.
If the WSP does not take up the service delivery for the existing UDDTs the landlords will have to make
use of informal service provision which should be avoided at all cost.
3.3
The SafiSan DTF Operator Business Plan Template
Following the rationale provided in Chapter 2.4 The DTF Operator Business Model, UBSUP does
currently not recommend the outsourcing of the DTF operation to private entrepreneurs. Therefore,
no business plan has been developed. However, this chapter will provide information and calculations
for the WSP in order to make the operation financially sustainable following the Sanitation Shilling
Approach.
The Sanitation Shilling Approach looks at adding a certain amount to the water bill. Every client who
has a water connection will pay a small amount per consumed cubic meter in order to cross-subsidize
the operation of decentralized treatment facilities.
The calculations provided herewith are based on real figures. The needed amount to be charged to
each cubic meter is calculated with the number of connections and amount of water (m3) billed.
The estimated operation and maintenance costs for a SafiSan DTF (Sanitation Centre) which can serve
5,000 people are calculated as follows:
Table 12 - Calculation O&M Costs for a SafiSan DTF Serving 5,000 People
Item
month
month
month
month
Unit Price
(KSh)
13,000
15,000
10,000
11,000
No. of Units
Required Per Year
12.00
2.00
2.00
24.00
Annual Costs
(KSh)
156,000.00
30,000.00
20,000.00
264,000.00
4,403.01
KWh
17
2,200.00
37,400.00
KSh/month
20,000
12.00
Unit
Plant Maintenance Engineer
Technician
Security Guard
Administration & Management
Pump 1
Lighting etc.
Spare Parts and Consumables
Depreciation of Short-Term
Assets
Laboratory Expenses
240,000.00
65,000.00
1 test
10,000
6.00
60,000.00
Sub-Total
896,803.01
Misc. and Contingencies
89,680.30
TOTAL Annual O&M Costs (KSh)
986,483.31
The overall O&M costs of one Sanitation Centre with the capacity of 5,000 people is slightly under 1
million KSh per year. In order to calculate the Sanitation Shilling we need to add the expected expenses
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UBSUP Business Models and Business Plans
for the receiving of the toilet content provided through the Sanitation Teams as per the business
model in Chapter 2.3 The Sanitation Team Business Model.
Following the recommended scenario, one Sanitation Team is expected to receive 57,000 KSh from
the DTF per year. Therefore, the overall cost to be covered is calculated as follows:
Table 13 - Overall Cost Calculation for Sanitation Shilling
Item
Cost
Total Annual O&M Cost DTF (KSh)
986,483.31
Annual Payment to Sanitation Team
57,000.00
Total
1,043,483.31
In order to estimate the Sanitation Shilling per m3 the UBSUP team collected information from the
participating pilot WSPs. The following scenarios have been calculated:
Table 14 - Calculation of the Sanitation Shilling
Description
Unit Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5
Sanitation Centre
No.
1
1
2
3
5
Total Annual O&M cost
KSh
1,043,483 1,043,483 2,086,967 3,130,450 5,217,417
Customers
No.
5,000
20,000
50,000
200,000
500,000
3
Estimated m3 billed
m
75,000
300,000
750,000 3,000,000 7,500,000
Estimated m3 collected
m3
52,500
210,000
525,000 2,100,000 5,250,000
Sanitation Shilling Calculations
Annual cost per customer
KSh
208.70
52.17
41.74
15.65
10.43
3
Annual cost per billed m
KSh
13.91
3.48
2.78
1.04
0.70
Monthly cost per customer KSh
17.39
4.35
3.48
1.30
0.87
Monthly cost per billed m3 KSh
1.16
0.29
0.23
0.09
0.06
There are three models of billing the Sanitation Shilling:
1) Fixed Fee: Every customer has to pay a fixed fee independently of the water consumption.
Depending on the scenario adopted the amount would range from 17.39 KSh to 0.87 KSh per
month.
2) Based on Consumption: Here, every consumed m3 water comes with a small add-on to the
water price. In this model, those customers who consumes more water (e.g. commercial and
public users) would contribute more to the cost coverage than customer with a low water
consumption. Prices would range between 1.16 KSh and 0.06 KSh per m3 per month
3) Mixed Model: This model would combine the two models presented above. The bill would
include a fixed fee plus an add-on to each m3 consumed.
Model 2 and 3 need to add a factor to their calculation. Since normally the collected amount for
consumed m3 is lower than the billed amount the calculation has to cater for it. This factor has to be
established individually for each WSP. The actual cost per customer, however, is not expected to
change much.
The scenarios of the Sanitation Shilling will further change if there are many exhauster trucks and/or
clients directly connected to the DTF. Those clients will pay for the treatment service and would
therefore contribute to the cost coverage of the operation and maintenance of the DTF. The effect
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UBSUP Business Models and Business Plans
will be little in comparison to the main cost but may cover the costs for paying the SafiSan Sanitation
Teams.
3.4
Cooperation between SafiSan Entrepreneurs
This document focussed on developing individual business models and plans for different sanitation
stakeholders. The models have been developed without taking the overlaps and potential cooperation
into account. SafiSan Artisans, SafiSan Sanitation Teams and SafiSan DTF Operators need to work
closely together. All are working with the same clients but covering different needs. Therefore, it
would be beneficial for all stakeholders to actively exchange information on customer and
developments. All business models would benefit from this kind of cooperation.
The following figure is highlighting some of the cooperation benefits from each involved stakeholder.
There are more stakeholders who can have an impact in improving the sanitation situation in a specific
areas. Especially religious institutions, opinion leaders and schools are crucial for sensitisation and
promotion of improved sanitation practices.
Especially the link between the SafiSan Artisan Company and the SafiSan Sanitation Team can offer a
lot of benefits for both parties. Through the promotion of UDDT toilets through the artisan, the
sanitation team will be able to increase the market potential. On the other hand, if a good emptying
service is provided, more people may contract the artisan company to construct their toilets.
SafiSan Artisan
Company
Giving Regulatory Guidelines
WASREB
Giving Regulatory Guidelines
Generating Business
SafiSan Sanitation
Team
UBSUP Team
Capacity Development
Giving Regulatory
Guidelines
Law Enforcement
Delivery of Toilet Content
Law Enforcement
SafiSan DTF Operator
Public Health Officer
Management
WSP
Law Enforcement
NEMA
Law Enforcement
County Government
Figure 12 - Cooperation between SafiSan Stakeholders
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UBSUP Business Models and Business Plans
The DTF operator and as such the WSP will benefit from an increase demand on treatment services in
specific areas. The WSP has an interest that its facility is well used since otherwise it is economically
not viable.
The Sanitation Agent
It could be imagined as well that at one point there would be one entrepreneur covering several
activities of the sanitation value chain: The Sanitation Agent. The Sanitation Agent is a concept which
looks at combining all or parts of the individual business models. It could, for example, provide the
construction services of SafiSan toilets, the emptying and the reuse of treated sludge. The operation
of the DTF could theoretically be done as well by a Sanitation Agent (lease agreement with County
Government) but it would need a lot of technical knowledge to do it right. Therefore, it seems that at
the moment it should remain within the responsibility of the WSP.
SANITATION AGENT
Construction
SANITATION AGENT
Emptying
WSP
Treatment
SANITATION AGENT
Re-use
Figure 13 – Potential Activities covered by the Sanitation Agent Model
The Sanitation Agent Model could be an interesting option at a later stage of the up-scaling and should
be further elaborated.
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4. Conclusions and Way Forward
The UBSUP programme foresees working with private entrepreneurs to provide sustainable and
professional sanitation services. The private sector will only enter business ventures if there is an
interesting opportunity. This document tried to highlight potential business models under UBSUP.
Business models were translated into business plans for fictive companies. Those business models
should act as templates for real entrepreneurs when assessing the potential of business ventures in
sanitation service delivery.
This document concludes and demonstrated that there are business opportunities for different
private actors. Those are in detail:


Artisans focussing on constructing SafiSan infrastructures, and
Sanitation teams providing emptying services to clients with a SafiSan UDDT toilet.
Both business plan templates started from the same point: on person already working as an artisan or
in toilet emptying, respectively, has the entrepreneurial spirit of becoming a service provider
specialized in SafiSan infrastructure or SafiSan service delivery. In addition, the document showed how
a WSP can sustainably cover the operation and maintenance costs of the SafiSan DTFs.
All models and calculations are based on several assumptions which have to be considered, applied
and/or modified when assessing a business plan for a concrete business venture. The main
assumptions are:
SafiSan Artisan Company





A similar demand curve can be expected as experienced during the pilot implementation.
An early preparation of the business venture is done in order to gain a higher market share.
A successful operation resulting in a slowly growing market share.
A certain number of daily workers are available and can be contracted on a needs’ basis.
The company does profit from the Social Animator’s marketing approach.
SafiSan Sanitation Team






There are at least 157 SafiSan UDDT toilets which need emptying services twice a year.
The customer is willing and can pay 1,000 KSh per emptying activity.
The SafiSan Sanitation Team receives 100 KSh per delivery at the SafiSan DTF.
1 person manages the company with little additional support contracted on a daily basis.
No office or land is needed for the operation and as such no cost occurs.
The SafiSan project offers a subsidized emptying equipment.
SafiSan DTF Operator





The WSP is in charge of the operation and maintenance.
The County Government is in charge for reinvestment.
The WSP can apply the Sanitation Shilling concept to its customers to recover the O&M cost.
The operator is capable of operating the facility.
The operator pays the SafiSan Sanitation Team for delivery of toilet waste from UDDTs.
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