I used to help run The Good Coffee House in the Park Slope section of Brooklyn, NY. It's still in operation about 25 years after its founding, with concerts on Friday nights at the meeting house of the Brooklyn Society for Ethical Culture (http://www.bsec.org/events/coffeehouse/index.html). Back in the late 70s when I was involved, we had a committee of about 6 core members and some less central participants who all worked on the program, helping to set up the room, collect admissions money, clean up afterwards, and so on. All were volunteers. I can't imagine how it would have succeeded without the collaboration of this dedicated team.

The lion's share of the admissions money went to the musicians and another chunk went to the Society for use of the space. The rest of the cash went to advertising, flyers, and the coffee, which we made a point of providing for free. Baked goodies were prepared and sold as a sidebar by one of the volunteers. Attendance for the weekly concerts could range up to 100, although it was rarely that high. Most of the audience were singles in their 20s-30s, although we certainly had older folks and kids, too (we let the kids in free, which tended to make loyal customers out of their parents).

Our musicians were mostly local, although we did eventually get the audience numbers up to the point where the gate share could support some traveling folkies, who added to their take by selling their records (those frisbee-like things we had before CDs). Bands brought their own sound systems if they wanted one (the hall was small enough that it wasn't absolutely necessary), or we have some contacts if they wanted to rent sound locally.

I doubt if we could have attracted the audience or sustained the program if the program hadn't been formalized. A jam session or a more casual, open mike program wouldn't have done the job. I KNOW that the place wouldn't have succeeded without team of volunteers, and I KNOW that the coffee house wouldn't have provided anyone with anything even beginning to approach pin money, let alone a living wage.

For another successful volunteer-run coffeehouse that was founded around the same time as TGCF, look at the Cherry Tree Music Coop in Philadelphia -- http://www.cherrytree.org/.

Good luck!