This is what I do - your mileage may vary
1. saying "Magic Show! Magic Show! You don't want to miss the magic show. Hey kids, stick around - the show's just about to start" (or words to that effect) loud enough to be heard, but not to the point of screaming. I do some visual stuff something until a couple/few people stop. I do some more close-up stuff while trying to bring some more people to the edge of the circle. Once I've drawn as big a crowd as I think I can, I start the show proper.
2. be likeable and run a good, tight show. I try to get a few lines like "what a stupid way to make a living" in to plant the idea and tell them that "complaints should be written on the back of a twenty, as that will get my full attention." If anything trickles in as the show's going on, I thank them, and say (tongue in cheek) that "we could all learn something from this kind young lady," or "that's so kind - thanks! I really wish I had a better act for you" or "every donation goes to a needy magician."
At the end of the show, I thank them for watching, and if they have anything they can spare to support the arts, I'd be extremely grateful. I've had a blast working for you all today, and hope you have a great day. Thank you.
As for a spot, somewhere with decent traffic, where tourists go. They have time and money, and they're looking to have fun. Best luck I've had is at a open-air market that shuts down the streets to cars on some Sundays - it's an artsy, Bohemian neighbourhood, and it's jam-packed with people shopping and having fun.
Your first 20 minutes will be an eye-opener. Pay close attention to your audience, and they'll tell you what's working and what isn't.
And good luck - tell us how it goes!