Yes, that's the correct way of doing it! The minimum amount of spacing is usually the amount that the head overhangs the block by, but it's usually a little more because of the availibilty of shim and spacer thicknesses. And it's usually better to make yourself a little extra room to work, unless you're planning on driving a full stack of accessories off the front of the engine. I can tell you that air coonditioning and power steering makes things interestng in a bad way in a hurry.
