also might make it lesson policy that if there are siblings and they take turns I need to be paid extra for the time managing the other child.
Of course you have to use your own judgement and certain situations may arise where it is totally ok to do this but I personally would avoid this if possible.
Three ideas that I think should be considered: saftey, sibling rivalry and training focus.
SAFTEY: If the students are coming to your studio and being left there you have a duty of care for them. I know this sounds melodramatic but imagine if one of these kids who are waiting for their lesson injures themselves while you are not looking. You just can't care for these youngsters without negatively impacting on your teaching product.
RIVALRY: Also siblings being in the same room while having lessons is usually a bad idea. Siblings often compete with one another on many different levels, if one sees they are having a different experience during lessons (doing better or worse) it will impact on their motivation, they should not really listen in on each others lessons because of this.
FOCUS: The major advantage of one on one lessons is that you can assist a students ability to focus on a personal level. This is something that you just cannot do when teaching a large classroom. It is impossible to micromanage each and every students attention requirements. So as you add more students to your classroom you limit this great advantage.
Many young students have challenges to focus during one on one lessons. If you then have another student sitting around who also needs their attention managed this multiasking can be very difficult, the students with distract one other unavoidably and just add to the teaching challenge. Many kids who have lessons with me are overworked, they have many activities outside of school, they hardly have a break. So in lessons often I have an exhausted student to deal with which does take a lot of energy on my side to support them. When I am motivating a tired students to go through their work effectively this requires a constant connection with them, if suddenly my attention goes over to another student I can't maintain that support effectively and the student at the piano suffers (they are allowed to break free of focus training during a period where it should be maintained).
During lessons with tired students I notice a disconnection from them periodically, it is important to allow them that disconnect but you should be able to renew quickly after they have had enough rest. These rest points however need to be carefully managed and you must push the student to work through periods of wanting to rest. This dance of attention plays a large role in many of my lessons and would be disrupted by another student requiring attention.