How do you know when your manuscript is ready?

I am a huge fan of making your manuscript shine, regardless of which publishing path you are choosing to take. And there is a lot you can do to make it shine like the midday sun on a polar-vortexed field of snow.

Things to do when revising
(Revising to me means changing content.)

• Think about every single piece of advice that you hear in the context of the book you're working on. You read a lot of blogs, right? Maybe even read a lot of books on craft? Go to conferences? Think how you can use what they suggest to make your book stronger. Then add in those layers into your manuscript. Add that depth to that one character. Spend some time thinking about how to change your book based on those suggestions. Do this enough times, and your setting/characters/plot will feel like they're a real place / real people / could really happen. The more layers you get, the more people will be invested in this world you created.
• When you read through your ms, if you ever think, “I don’t know how they [agent/publisher/readers] are going to take this part,” then change it. That's the little warning light in your brain, blinking, letting you know that there's a problem with that scene/chapter/section. Keep going through your ms until you don't have any more parts you wonder about.
• Read it through and see if it reads like a published book. Don't fall into the trap of thinking that it's supposed to be rough until an agent and an editor works their magic on it. Think about the last "just okay" book you read. There were things that you didn't love, or that weren't done well, right? Each time you ran into them, you pushed them into a little container in the side of your brain and kept going because of the parts you liked, right? But if there were too many things that bugged you, your little container got full, and suddenly you cared a whole lot less about finishing the book. Agents / editors are the same way. Try your best not to give them things that are going to go into their container.

Things to look for when editing
(Editing to me means grammar stuff.)

• Don't use was ___ing (or were ___ing. Or am ___ing) unless you have to. As in, don't use something like "We were running down the street." (Or "I was running down the street," or "I am running down the street.") Just use "We ran down the street." (I ran... I run...) Why? Because was ___ing is less concrete. Notice how "We were running down the street" feels more like you're watching from a distance and they're kind of floating down the street. With "We ran down the street," you can feel the pound of each foot on the pavement. Using -ing words does NOT make the action feel more "in the moment." I just doesn't. Is there ever a time you should use it? Yes. When something is actually in the middle of happening. For example: "When we walked outside, the sun was shining." You can't really change it to say "When we walked outside, the sun shone," because then it sounds like it JUST started happening when they walked outside. Basically, if you change it, and it changes when something happened, leave it. Otherwise, get it out.
• Inanimate objects can DO things. This is a HUGE one! Using "was" or "is" isn't so desirable, is it? As a reader, it makes it feel like you're being told everything, instead of seeing it. So, instead of saying "The building was at the end of the road..." Use "The building sat at the end of the road..." Instead of "The clock was in the middle of the wall..." use "The clock hung in the middle of the wall..." Easy peasy. Yet makes a huge difference.
• Watch out for phrases like Walking to the door, she opened it. Okay, um... You can't open the door at the same time that you're walking to it. Be careful with these! It's a rare case when it's a good idea to start a sentence with a word that ends with "ing."
• Don't use filters unless they're absolutely neccessary. I think (or he/she thought), I knew (or he/she knew), I saw (or he/she saw). Or smelled. Or felt. Or any other filter words. Use these, and the reader stops feeling like everything is happening to them, and starts feeling like they are watching the things happen to your character. It’s no longer personal to the reader. Why? Instead of imagining how something feels, the reader has to imagine how it feels to that character, then think about how they feel about the character feeling that way. There's a filter there. THINGS GET TRAPPED IN FILTERS. That's kind of their job. There are very few cases when you need to point out that the character hears/sees/thinks/feels/knows/smells something. Most of the time, that's understood. If you come across any of these, take it out and see if it still makes sense. Chances are, it will.
• Use economy of phrasing. It's amazing how complicated we make sentences the first time around. Take a look at each and every sentence and see if there is a simpler, more concise way to say it. Your job is to never confuse the reader. (Withhold things from them, sure. Use red herrings, absolutely. But never confuse. Especially in the wording of a sentence.)
• Look for pet words you overuse. For me, it's "just" and "that." And I am TOTALLY FINE with them going in the first draft. Everything flows better when I do. But when it comes time to edit, it's time to take them out! Actions can be overused, too. Glancing, shrugging, eye rolling... Just keep an eye out of anything you overuse. One of my favorite ways to find overused words is with wordle.net. Paste in your entire manuscript, and it will make a word cloud with your most used words. Some (especially character names and other things specific to your book) are fine. But you'll get a good idea of some words you should do a search for.
• Change your font. Sounds weird, I know. But somewhere toward the end of revising, change the font. If you've been using Times New Roman, change it to something like Arial, or vice versa. You'll be amazed at the things you'll catch when you aren't staring at the same font that you've stared at for the past gazillion revisions! Or send it to your Kindle, and read it there. Or have your Kindle or iTunes read it to you. Hearing it out loud helps you catch many things you'd miss otherwise.

So.... What if you've been changing your manuscript forever? How do you know when you're done? Couldn't you keep revising forever?

Yes, yes you could. If you get down to the point where you are fiddling with wording over and over, and you're only making minor tweaks, it's probably time to call it DONE.

Are you sure? Are you sure I'm ready?
Two things: 

• Don’t confuse hope and desire with being ready.
• But don’t confuse fear of rejection with not being ready.

Your gut will tell you when you are there! Listen to it. Then summon all the bravery and confidence you can muster and move forward with it in whatever direction your headed.