To become a guitar teacher, first and foremost, you need to be a good guitarist. That's obvious. Exactly how good is not so obvious though. Most people that approach guitar teachers are beginners or only moderately developed guitarists. This means that you don't need to be a top-flight guitarist in order to be a good teacher.
What does make a good teacher?
A good guitar teacher has a range of skills: patience, being attentive, empathy, being able to spot flaws in technique, etc. You don't need to have each of these abilities developed to perfection before you start your career. But you do have to continue working on them over time.
How do I ensure I earn a good living?
Good student retention is what determines long-term success. This means that your lessons and tuition must be of such a good standard that many of your students come to you for many months or years. If your turnover of students is too high then you will not be able to build up enough hours of tuition per week to survive financially.
How do I retain students?
Apart from the qualities already listed, you need to have good quality teaching material to give to learners. It is not enough to sit and talk about guitar playing, or to write a few chords on a page with a pencil. Those days are gone. Nowadays people expect more for their money. You need to prepare high quality, accurate transcriptions and chord sheets for your students to take away with them. Having a folder of good quality material to work from makes guitar practice more of a pleasure than a chore. This is crucial for your students' progress and your long-term success.
How much do I have to prepare up front?
You don't need to have several years worth of material before you take on your first student. As a minimum though, you must have enough material to teach beginner guitarists for several months. From the moment you start teaching, you will need to continue adding to your library to ensure that you always have further, relevant material to teach your students as they progress. You should also keep an eye out for gaps in your teaching material, and try to fill them as soon as you notice them.
What resources are available to help?
There is a wide range of free resources available on the internet that you could potentially use to help develop your career. This includes the basics of marketing, lists of popular guitar songs for beginners, chord charts, jpg files of scales, etc. There are also many transcriptions and chord charts for well-known songs online. The quality of these, however, is highly variable so you much check these charts and make any necessary amendments before you use them in your lessons. There are also a small number of courses on how to become a guitar teacher.
In addition you should use your experience of taking lessons from previous teachers. What approaches of these teachers did you like? What didn't you like? Why not? What prepared material did they give you when you took lessons from them? Was it good enough? If not, why not?
Teaching the guitar is a very nice and potentially lucrative way to earn a living. As long as you dedicate time and effort to improving your teaching methods there is no reason why you can't make a success of it. How much you teach, and how high a level you take your tuition, is up to you. Unlike more seasonal performance work, guitar teaching will always be there for you, the whole year round, and may prove a valuable income stream in years to come.