Developing the target company list is finding every company in the industry and niche vertical markets the search is focused on. Boyden, a top 10 global search firm, refers to this task as “including target sectors and companies.”
The target company list should be big enough that you don’t have to keep going back to the research phase during the later parts of the assignment. Five target companies is in all likelihood not going to give you enough options. Many of the searches I have worked on have had a minimum of 20-50 target companies, dependent on the size of the industry or sector.