Mark Cuban Says You Should Ignore Economic Indicators. Here’s Why

It has been more than two weeks since there have been any official economic indicators. The ongoing government shutdown has paused virtually all reports from agencies like the Labor Department and Commerce Department. (There are reports that the Consumer Price Index will be released on Oct. 15.) When the numbers are normally released, though, they’re scoured by analysts, investors and business owners for hints about the business world. But for founders and entrepreneurs, says Mark Cuban, they’re basically useless.

While data like jobless claims and retail sales give a good macro look at the economy, he argues, they don’t define what’s going to happen to individual businesses. And planning your company’s strategy around them could send you down the wrong path.

“When you hear about inflation from the Bureau of Labor Statistics, that has nothing to do with you,” Cuban recently told Inc. editor in chief Mike Hofman at the Clover X Shark Tank Summit in Las Vegas. “We live in a bifurcated world [and] country right now.”

Macro retail sales might be showing gains, for instance, he said, but business owners who see their customers struggling might wonder how that can be. Cuban blames the widening gap between economic classes, saying “it’s because rich s**t to rich people keeps on going up.”

The Indicators That Matter

To get a real sense of the economy as it relates to your business, he says, the secret is to increase communications with your customers. Learn their circumstances and see where they’re struggling and where they’re thriving. That will help you decide the best way to steer your company.

Talking with customers sounds easy, but Mark Cuban says it’s often not. To learn the truth about where they stand, you have to be willing to honestly discuss where you and your business are as well. And that vulnerability can be intimidating for both parties.

“No one wants to put themselves in that position, but you have to talk to them and be brutally honest,” said Cuban. “During COVID, when everything was falling apart for everybody, rich or poor, it was a little bit easier to talk to people because we were all struggling. But now, it’s hard to know who’s struggling [and] who’s not. It’s all the more reason, as a founder, you have to communicate more. … if you don’t know what’s in the heart, mind, soul, budget and bank account of your customers, how are you going to know how to price your services, your goods? How are you going to know how they’re going to respond?”

That communication can take lots of forms. You can reach out via email or talk when the customer comes into your business or when you go to them. Foregoing that communication, though, can breed uncertainty, Cuban said. And that costs small businesses not only more cash than it costs big businesses, but more important cash, since it’s a bigger part of a startup’s total capital cash availability.

The Importance of Cash

Broad sector-wide sales numbers don’t impact your business. Your company’s cash flow is much more important, he said.

As an example, Mark Cuban cited his own Cost Plus Drugs, which, like so many businesses, went on a buying spree, pre-ordering products after the Trump Administration announced its tariff plans. Many companies borrowed money or used all of their available cash to do the same. “So now we have all this inventory, and that’s all your cash,” he said. And that makes sales even more critical than usual—no matter what the broader economic indicators might be saying.

“It’s not so much what everybody else thinks,” he said. “It’s how are you going to, you know, monetize what you have? And it goes back to the same old thing: Sales cures all. When we have uncertain times from an economic perspective, you have to get out there and hustle more. You have to find ways to move that inventory.”