Which is a common strategy for managing risks in micro-enterprises?

Diversifying products or services is a common strategy for managing risks in micro-enterprises because it helps to spread risk across different offerings and reduces dependence on a single source of income. By introducing a range of products or services, a micro-enterprise can tap into various markets and appeal to different customer segments. This not only mitigates the impact of fluctuations in demand for any single product or service but also enhances overall business resilience. If one area underperforms, other offerings can help sustain revenue and keep the business afloat.

In contrast, concentrating on a single market can increase vulnerability, as the business would be heavily reliant on one segment's performance. Similarly, reducing advertising spend might limit exposure and decrease customer acquisition, potentially leading to decreased sales opportunities. Finally, eliminating contingency plans is detrimental as it removes the framework for effectively responding to unexpected challenges or crises, thereby increasing risks rather than managing them.