| First I would check out other teachers in the area and see what they charge. I would also search the internet for various Music Stores, Lesson Studios, and Private Teacher home pages to see what people charge and what their policies are regarding attendence, cancellations, payment, etc... I have gained wealth of information this way, and you get to keep tabs on, and get ideas from, your competition.
The most important advice I can give is have all of your policies in writing and make sure the student and or parent is fully aware of everything upfront. My students all sign a copy, as well as recieve one for their own reference. That way if there is a dispute of any sort, they can't say you never informed them.
Don't forget you are running a business, so don't be afraid to hold people accountable for paying you. Good luck.
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"The best teachers are those who remember what it is like to be the student."
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