There is no single right way to approach a potential audience. The key thing is to get over any fear you might have about approaching them, as nervousness and tension will transmit to them and make them feel uncomfortable. With that in mind, the key thing to remember is to relax yourself as much as possible before approaching. You can do this "artificially", by taking deep breaths, and progressively relaxing your muscles from the top of your head to the soles of your feet. Alternatively, you can just practice approaching people and build up confidence that way. So, find excuses to approach people. Maybe ask them what the time is, ask them for directions, something like that. Try this with various different sizes of groups, ages, and in different situations. When you're comfortable doing this, add in a bit of performance. Not necessarily magic, but maybe have a funny line prepared and try and get a laugh, or try and engage them in conversation. When you're comfortable approaching strangers and making them laugh, or just talking to them, then you can introduce the magic.