You had 63 people show up, that is certainly not the norm otherwise this thread wouldn't exist. You also had a good deal with the venue. At most you made 315, but you said "we made hundreds" implying you split it. So I think your hundreds is an exaggeration much like my "only make $25 was."
I would say 20-40 people is much more realistic attendance to expect. So with a five dollar venue fee you are making 100-200 dollars. At a house venue that is pretty much pure profit. At a low end venue you are looking at a 50 - 150 dollar venue cost. In this scenario losing money is a real possibility depending on the cost of venue and attendance. Most TO's aren't going to add break even analysis to their list of task to do to set up the event. Your high end event places (usually places that cater and host weddings) your looking at around 300+ or a per person charge. Not much room to make money there.
My analysis on the whole idea of making tournaments as a business is this it is a okay idea if you really like gaming and the community. It is a lot of hard work and you really need to reach into other communities to be profitable. If you are going to start a tournament business now is a good time, but you are still a little bit behind.
Working on Saturdays is guaranteed money, it doesn't waiver with increased cost and/or decreased attendance. I probably spend like 3 hours setting up Friday night and like an 1 hour of last minute stuff on Saturday. Then it is like 8-12 hours of working the event. It isn't tough work but it can be draining. The biggest downside is that attendance is never a guarantee.
So lets not be unrealistic here and say some hundreds of dollars is waiting for everyone and anyone who host tournaments. It just doesn't happen, I would say that after running quite a few tournaments you would find your average to be around 50-100 dollars. You are going to find in most situations having an actual job to be the better financial choice. Also you can't reasonably run a tournament every week whereas you can work every Saturday. I could argue the lawn mower thing but again that wasn't my point.
As for the other issue. Posting on AiB is really simple and should be done but I haven't really found it to bring in more attendance. I also found that AiB people are less likely to show than Smashboard members.
I think new members should be the focus. What is happening is we aren't replacing the members who quit with new members. People are going to quit playing for one reason or another, it happens. We need to be more welcoming and more aggressive in our pursuit of new members. This really to me falls on the TOs more than it does the community. The community should of course help, but the TO is responsible for being the driving factor to getting new people to come to tournaments. I think local schools are the main place TOs should focus their attention. From then I would hang around local hobby shops.
I know NWC hasn't gone to many tournaments. Mostly my fault really, but we have been to some and we are getting more and more people interested in competitive smash...competitive gaming in general. We have a group that practices Soul Calibur and SSF4. We have two kirby and a marth main who are interested in getting better and want to go to events. To be honest I have no idea why they want to get better and compete. We mostly play free for alls at HCC, we didn't shove no items 1v1 down there throat, but somehow they began to desire this.
So my advice for TOs, find local players and play free for alls with them. They will notice you are better than them. Maybe ask you how you got to be so good. Tell them but don't gloat. If you have another tournament going friend use them to discuss tournaments while you are around potentials. Once a person desires to get better it is only a matter of time until you have a group of players wishing to get better for one reason or another. If you make their first tournament a good one then you have got em.