Same with us, Roger, as a folk club. We have to hope, if we have agreed a price with the artist, that we make enough to cover their fee otherwise we are out of pocket. It's noy easy as a new club either, & I think even the long-established ones have problems from time to time.
It's very limiting too as you are almost bound to book well-known performers, otherwise no-one comes. We had a local duo a month or so back who are very talented, & they agreed to come for half the door take. In the end we gave them all of it as it only amounted to 25UKP after taking out the payment for the rooms. That's about 40 US dollars.
However, there are always very few advance bookings for a folk club, unlike festivals etc. So really you just have to trust to luck. A cancellation would only happen if the artist was sick, for instance.
I wish there were more people prepared to pay out ewhat are really small amounts of money to go & see live performances. This seems to be a problem in the UK now; tickets generally cost between, on average, 4 - 10 UKP (thats about 6.5 - 16 US dollars) & the cinema is about 6UKP - 9.6 US dollars. I'd rather pay to see a live performance any day.But I think a lot of people think folk music ought to be free.