Giving lessons -- any experience with this?

[Eric***]

So this morning, I get a call from someone from the church where I play who wants to know if I give guitar lessons. He bought his daughter a guitar for Christmas, and would like to give her lessons.

I've given informal lessons to my bass-playing friend for a few months, and he's made decent progress. Of course, in that instance the lessons were free and we did plenty of BSing during the lessons, so I don't feel like it's directly applicable.

So the question: what do I need to know if I am to do this for real? What's a fair rate? How much should I know before I start giving lessons? I told him I'd call him back today once I had thought it over.

Any/all input is appreciated.