This is the traditional way to manage handicaps when players play a longish series of games. Another way that might be more efficient in getting started is to start with some handicap (or even) and then change the handicap after each game, up one if white wins, down one if black wins. When the handicap settles down to oscillating up and down then institute the "lead by three" policy.

One thing that is important to know is that when there is no established rating system in place handicaps don't follow any specific rule. It could easily happen that B takes two stones from A and C takes two stones from B but A can't beat C giving three stones. You'd think that A would give C four stones but handicaps often depend on the specific players and don't work linearly.