Good advertising and a decent prize fund are the key things. Maybe you can popularize your brand or company by keeping seminars or lectures for free or something like that. You can also start a club!
Organizing tournaments - and making money
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And not forgetting the thing, BEING UNIQUE. Don't copy the things which your competitor does. Instead do something unique things. Can't think of any ideas ATM tho.
@ All_Exceed
Yes, I know that prizes do attract but the thing is that it's supposed to give me a profit. So a decent prize fund can't be the main reason that people attend - unless there are sponsors.
The thing about giving free lessons is interesting. I've also been thinking about giving some other non-expensive 'thing' that can be combined with chess but I'm still thinking about it.
Any more ideas from you guys out there? 
How much money can be made by organizing chess education and tournaments?
I've been arranging some small tournaments for kids and have also helped organize bigger tournaments for adults.
I've been wondering how much of a living I can make of this since it would be a nice way of making an income, combining my hobby and a job. I've asked a guy who runs a tournament (and has a nice income!) on how he does it but he only says that it's his 'talent' that does it and generally doesn't want to help me. He probably doesn't want to give away his business secrets since I'm a potential competitor.
Have any of you made money on organizing chess teaching by other coaches in combination with tournaments? How easy is it to get people to sign up for this and how do you advertize it?
Any comment would be nice!