So how do you know when it's ready?
I tend to stop when I've done everything I can think of and I'm sick to death of the whole thing. At this stage I will have...
* Sent out to my friends who read for me and incorporated their comments.
* Used index cards several times to check for pace and variety, and to see if there are any gaps.
* Highlighted every good phrase on every page, and made sure that there are at least 5 a page.
* Read the whole ms aloud at least once to check it flows well, the grammar works and there aren't hundreds of typos.
* Sorted out anything that's niggling me.
This last one is a killer. There are often things that you secretly know aren't quite working but you pretend to yourself that they're not really important, or that no one else will notice. Ha! They are, and they will. You're only putting it off because you suspect it's going to involve a lot more work than you want to do at this stage. Just do it.
And then it's done.
Anything more is hanging on because you're worried about what's going to happen when you send out. Sometimes not knowing feels better than risking rejection. But if you want to get published you have to send out. So stop editing, and get on with it.