Hi M.! I have worked in child care for years and then have 3 of my own. What works best for me is Magic 123. Basically how it works is when they are misbehaving you say firmly how they should be acting or a consequence will happen. As they continue to misbehave you say "That is 1......2.......3" giving them a quick chance to correct between each number. If your little one does not correct by 3 then the consequence happens. Wether it is a time out, a toy taken away, something tough and immediate.
As for a time out find a spot in your home that you can always use for the time out. Ours is next to a piece of furniture against the wall where I can see my 2 year old in the kitchen or living room. There is no toys or anything to play with within arms reach. I sit her there and say firmly "you are on a time out for..." and walk away. No eye contact, no talking about what happened. If she tries to get up I sit her back down without looking at her or saying a word. A time out is 1 minute for every year. So my 2 year old is 2 minutes, your 3 year old is 3 minutes. After the time is over I tell how she should act "you need to show gentle hands" or "we are gentle with our toys". Then she says sorry and it's over. I think it is harder on us than it is on them!
The first couple time outs are difficult. But they do learn quickly. Here are some links. Good luck!!
http://www.supernanny.co.uk/Advice/-/Parenting-Skills/-/D...
http://www.amazon.com/1-2-3-Magic-Effective-Discipline-Ch...