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PS Why in groups?
Group teaching is best done for children aged 8 upwards. A group lesson should have no more than four pupils in it and should last 40-45 minutes. I charge &10 per half hour lesson individually and &7.50 per child for a 40-45 minute group lesson. When group teaching you should aim to make more money than you would teaching individual lessons, otherwise it is not worth your time and effort.
It is very true that children progress at different rates and yes this can be hard to deal with in a group lesson but for the pupils they have the companionship of other lesson friends and they can work as a team also having that factor of performing which you don't get in individual piano lessons. One suggestion is for your pupils to have one group lesson each week and one individual lesson each week, that way they get to concentrate on finer points in the individual lesson and then learn performing aspects and have fun in the group lessons.
When group teaching my pupils don't spend all their time playing the piano, they do mini tests/games at the beginning of each lesson such as hangman where they guess musical words. There is so much you can do with your own ideas, you don't even have to follow a tutor book religiously. You can play duets, trios, there is so much you can do!
It's great fun...I say go for it!
Don't do it! They'll only distract eachother, and one to one teaching is far more productive - you have a better chance to build a proper relationship and learn the child's strengths and weaknesses as an individual. And you'll need less Prozac...