Have you finished a complete manuscript?
Getting the story down on the page in its entirety is the first step towards writing a book. Until you've done that, worrying about getting everything perfect will only hinder your writing. I've known many wonderful editors who cannot write their own books because they cannot turn their editor hat off long enough to write a first draft.
Have you taken a break from it?
After you finish writing a manuscript, you'll have the story fresh in your head. You'll be caught up in the feeling of finishing it and familiar with the story as it was pictured in your head. These feelings make it hard to read the words that are actually on the page.
Have you read it again with fresh eyes?
The first round of editing should always be done by the author. No one will ever instinctively understand what you meant to say as well as you. Your unique voice will help you correct typos and missing words that make it hard for others to read the book.
Have you had feedback from a friend or beta reader?
Professional editors can offer a distinct perspective, but their feedback is only helpful if you are ready to hear criticism of your book. Getting criticism can be an emotional experience. You may need time to process the feedback. You'll need to learn how to sort through the feedback to decide what you agree with. You'll need to choose how to address problems they point out. To get the hang of these new skills, have someone else criticize your book before you pay for an editor.
This will also help you determine your preferred editing style. Do you like direct and to-the-point feedback or gentle feedback? Do you prefer someone to only point out the issues or to offer solutions as well? There are many ways an editor and author can work together on a manuscript. The more you know about your own preferences, the better you can find an editor who is a good fit.
Have you done all you can on your own?
Do you see any problems that you can solve? Have you run the available spell check or grammar checks? The more you clean up on your own manuscript, the less work the editor will have to do and the more useful their work will be to you. Instead of spending their time wading through errors you could have found on your own, they can spend their valuable (and expensive) time identifying issues you couldn't find on your own. Clean manuscripts will usually cost you less in editing fees.
Once you've finished all these steps, you may be ready to hire an editor. I'll be posting soon about how to figure out how editing fits into self-publishing and traditional publishing paths, as well as how to determine what you need from an editor.