Custom building is about producing fine homes and making a living, not about chasing clients to get paid or risking yourpersonal assets in the process. That is a point that Mike Holmes makes in his speaking engagements, in the construction management courses he teaches, and in the way he does business. By operating as an independent building designerand construction manager, Holmeshas offloaded the lion's share ofrisk he was subject to when heran a conventional custom buildingcompany.

Holmes made the change five years ago, after tangling with a client who withheld a final payment ofmore than $150,000. "It became a very rude awakening, he says. "I started to look at ways to limit the liability andexposure. His answer was to fashion himself as a consultant. Clients who hire him act, legally, as owner/builders, withHolmes as their agent. "They open a bank account and name me as a signatory on the account, says Holmes. From thataccount he pays the subcontractors, who executethe construction under direct contract with theowner. The owners also buy their own constructioninsurance and indemnify Holmes for constructiondefects. Being listed as an "additional insuredparty on trade contractors' general liability policies gives him an additionallayer of protection.

"Everything is a fee-based, open-book system, Holmessays. "I'm basically the same as a CPA or attorney. If [clients] want to meetwith me, they pay me. Under this scenario, I'm just the agent, and they ownthe consequences. In addition to being safer, "it's a much cleaner processinternally. With no crew to keep busy and negligible overhead, Holmes canoversee two design/build custom home projects, teach 16 hours of coursesat a community college, serve as an expert witness in construction litigation,and still have time for speaking engagements. His presentation at this year's International Builders' Show, "CoverYour Assets with Contracts, met an enthusiastic response. And it is no wonder. With his own contracts, Holmessays, "I've just taken that big bowl of risk out of my lap and put it back on the table, where it belongs.

• San Sebastian ConstructionManagement
• Reno, Nev.
• Type of business: design/buildcustom builder
• Years in business: 5
• Employees: 2
• 2007 volume: $1.1 million
• 2007 starts: 2