"I'm flattered that you asked me, but I am not ready to begin dating."
Set your boundaries now. If his feelings get hurt, that is on him. It's his choice to let your telling him "no thank you" bruise his ego. You can be firm and polite at the same time.
This sounds like a perfectly fine response!
"I'm flattered that you asked me...," lets him know that you take it as a compliment he was thinking of you.
"...but I am not ready to begin dating," states a simple fact.
He may feel disappointed, but there's no reason for him to feel rejected. If he falls apart over your honest answer, he's not ready to date and has some growing up to do.
Btw, I used to tell my kids when they were teens, "Blame everything on me and your father." In other words, to remove yourself gracefully from a situation, use the old standby, "My parents said I'm not allowed to date yet."