Well they wouldn't have asked if they didn't like your work.
BUT I just want to start off with saying that if you don't feel "ready" then don't force yourself. You should only start taking commissions when you feel comfortable with the idea.
I don't think theres like a set in stone way to do it honestly I think everyone goes about it in their own ways (well taking into account that there has to be a certain amount of professionalism when your dealing with real money).
My advice is to sit down and calculate your total cost (hair, paint, bait ECT) and then go from there as far as price goes. You also need to be honest with yourself and your commissioner about a timeline (this is a mistake I have made myself
)
Then you need to decide if you require full payment up front or partial payment and HOW you can be paid (ie paypal ect) You also need to take into account shipping. Now if they live in the same country as you then its not quite as big of a deal but if not then you gotta deal with things like customs and what not and that can be a bit tricky.
Another mistake I've made is not communicating enough, try to communicate as much as possible and send lots of WIP pics.