How do you build a student's confidence in a subject?

Start with an area they comfortable, confident, and (ideally) excited about. I believe it's best to build from a student's strong points and interests in order to expand their skills and comfort level with other areas.

How do you evaluate a student's needs?

I use diagnostic tests. If this is for the ACT, then simply having them take a practice test or looking at one of their recent ones. The same goes for the MCAT. When it comes to class subjects, I'll usually give them an age/class appropriate test to see where they are at. A few other key areas are confidence in their ability to learn the material and perform well on tests, interest in the subject matter, and willingness to commit to a study regimen. I usually assess these through a simple survey followed by talking with them.