Market cycles

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The term ‘market cycles’ typically refers to fluctuations in the stock market that occur over time, sometimes due to outside economic forces; but in reality can refer to anything that goes a cyclical set of stages.


They can happen at any time and on any scale, with periods of growth or decline lasting anywhere from several months to several years, and generally follow an orderly progression of four stages: Expansion, Peak, Contraction and Trough. When planning to complete a deal and exit a recruitment business, understanding these market cycles and being able to plan around them can not only influence the ability to complete a deal, but also the price/multiple that can be commanded.

The recruitment sector is a highly cyclical industry and is heavily influenced by the ups and downs of market cycles. When market conditions are favourable, there is typically an increase in corporate activity such as mergers, acquisitions and new business ventures, which can lead to a greater demand for firms providing recruitment services (and there attractiveness to investors too). Conversely, when markets become more challenging, corporations may become risk-averse and seek to cut costs, resulting in fewer opportunities for those providing recruitment services.

Take a look at the different stages of market cycles to understand what this might mean for the price multiple you can command, or the appetite of the market to complete a deal.

The different stages of market cycles

When markets are on the rise, there is often an optimistic sentiment that encourages companies to pursue investment, deals, or merger and acquisition activity. Companies have access to larger amounts of capital which allows them to expand their operations by merging with or acquiring another business.

During these times, existing companies may seek out similar businesses in order to gain a larger market share or gain access to new technologies or products that would benefit their own business practices. This could be beneficial in terms of achieving economies of scale, gaining access to new customer bases and increasing profitability.

On the other hand, when markets are declining, M&A activity typically shifts towards consolidation. Companies under financial stress may be more likely to merge with larger firms with more stable finances in order to cut costs and retain valuable assets necessary for long-term survival. Companies may also seek out distressed firms that can provide them with needed products or services at discounted rates due to their weakened position in the market. 

How we plan around market cycles at Bluestones

As we grow our divisional businesses and balanced portfolio, we’re mindful of the broader market cycles and macro-environment in which we’re trading as it directly influences our ability to raise capital, plan investments, and scope out exit strategies.

For investment businesses, it’s just another thing that the Group looks after so you can focus on your core recruitment business without issues such as this distracting you from your day to day growth activities. 

To find out more, or to have a confidential discussion with us about you investment needs, please contact us today.

About Bluestones

Bluestones Investment Group invests in staffing service companies. We operate a balanced portfolio of businesses in specific divisional sectors and are always keen to receive investment enquiries.

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What you need to know

Although our existing brand portfolio operates across five core sectors, we’re not restricting future investments to just those. If you have a good proposition and a believable plan, that’s half the battle – so talk to us today about how we can help.

We’ve refined our start-up process so that we can typically launch a new recruitment business, fully set up with all the necessary branding, systems, and accounts, within a matter of weeks. 

Firstly, we need you to submit your investment enquiry. You can do that HERE.


As long as there’s sufficient detail in there, our Investment Director will review your proposal. All investments submitted will receive personal feedback.


After that, if your investment meets our criteria, our Group CEO and CFO will review and sign off on the investment and we’ll get heads of terms and shareholder agreements drawn up. As an equity stakeholder in your new business, it’s important we get this all agreed up front.

Our investment criteria is fairly simple; we’re looking for the following:


  1. A realistic budget.
  2. Demonstrable knowledge in your location(s) and sector(s).
  3. Proven sales growth and track record.
  4. A structured plan for your new business.
  5. A vision for how you want to develop your business.

We expect you to have at least 3-5 years’ experience in your chosen sector. We need to have confidence that you understand your market and have a well-developed network of clients and candidates.

We offer one of the best all-round investment and support packages available for recruiters and recruitment businesses. From providing all of the upfront funding, guaranteeing salaries, providing office premises, full provision of IT equipment and services, and all the support services you need, including IT, legal, HR, Finance, etc.

We’re focusing on recruitment businesses within the UK right now and already have established recruitment hubs in Birmingham, Chester, Leeds, Liverpool and Manchester – with other offices around the country. 


As long as you’re based in the UK, you can trade wherever, and we can support you.

We invest in businesses that we believe can be successful. That means a business that can scale and grow at pace, that is typically break-even in year one of our investment, and ready to exit in year three, or preferably join our core recruitment business portfolio for further growth, increased value, and wealth creation. 

Speak to me about your investment

Matt Cody

Investment Division CEO

“We have a proven approach to investing in the recruitment sector, scaling businesses rapidly, and creating value. Let's talk."

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