Probably the most common editing clients I work with are romance writers. Romance is a very competitive genre, one that requires several releases per year, preferably monthly, to stay competitive and to maintain a readership.
Romance authors, understandably, crank out a huge number of books and can’t spend too much time on any one book, for fear of getting behind and perhaps losing readership. These authors have to quickly perfect their plotting, writing, and revising skills so that their writing is pretty solid from the first draft. (Side note: if you want an interesting read of just how romance writers do this, check out The Five Day Novel by Scott King.)
Readers of the romance genre tend to devour books — with some of them reading as much as a book a day. Granted, some of these are shorter books, so it is easier to read one, cover to cover, in a day. Readers therefore demand much higher turnaround of their favorite authors, meaning romance writers have to be more resourceful, but with skill that comes with writing many novels, great romance writers can turn around books quickly and effectively, because they know how to create the most important thing: a love plot that is worth rooting for and relentless conflict that has you reading on in suspense hoping your protagonist and love interest will get together in the end.
Readers of science fiction and fantasy, on the other hand, are much more interested in the nuances of plotting, world-building, and prose. These readers often, but not always, take more time with their reading than a romance reader does. They aren't in a rush to get through and will often stop to enjoy the view. Due to the nature of these genres, readers want to be immersed in new worlds, filled with fantastic technology and strange beings. They also prefer their books to be longer, especially in fantasy, so time spent on world-building and added layers of plotting is a must.
Thus, authors of science fiction and fantasy know the risk is much higher that they won't engage their audience if they don't go to the extra lengths their readers expect on every book. Science fiction and fantasy readers tend to be okay with waiting for your next book if they know it’s going to deliver on all the extra layers of amazing storytelling they expect. Even George RR Martin's fans, who have waited now nearly 6 years for the 6th book in his Song of Ice and Fire series, despite some frustration you hear about from fans, know that when the book comes out it's going to be stellar because he's demonstrated with the painstaking time he invests in his work that it translates to a book executed with mastery.
And somewhere in between all that is the broad vista of YA, NA, paranormal fantasy, urban fantasy, action, thriller, adventure, horror, and many of the genres where readers can't get enough of their favorite authors' series and the expectation is at least 1-2 books / year, where there is a lot more interest in plot and payoff and the standards are higher, but not so high that you need to make every book a masterpiece. (If there is anyone in the world capable of writing 1-2 masterpieces per year, please let me know because I'd like to study more of their methods!)
Am I ready to publish?
The main point I'm making above is that knowing if your book is ready to publish requires knowing your audience, and that means knowing your genre well. Usually (rarely not), the genre you will devote most of your time to writing in is also a genre you love to read. How else can you know what's going to excite your readers? (I'm not taking into account the exceptions, such as someone who might write a weight loss book based on their strategy to lose 200 pounds; or a fiction writer who had a profound life experience and turned that into a book that captured the hearts of millions.) When asking yourself if you’re ready to publish, you have to consider what your potential readers will think of your book.
It's important to know that, while editing can give your story an edge and prepare it for publication, it can only go so far if your story is not ready for publication; and only you can address that through strategic revisions, possible reworkings, continued education on craft and storytelling techniques, immersion in fiction to expand your awareness of the standards your readers will have (especially outstanding books in the genre you write in), and most importantly, a willingness to be relentless about finishing what you set out to do. When you submit your work, either to your agent, or to an editing team, your part of the work must be done so that the editing process can work effectively.
I write epic fantasy. I’ve been working on my novel, A Thousand Roads, for a few years now. I’ve had a few beta readers who have gone through earlier drafts of the book. I've even hired editors to work on some drafts (including my present one). The draft I'm finishing is hanging together pretty good and there's lots of improvements; in fact, I would be so bold as to say the book is moving into the territory of being very good. But I am also an avid reader of the epic fantasy genre and I know what I'm striving for in this book. I am a fan of exactly the "species" of books my book is striving to be like, and when I work on this book I know what I want this book to be, and this means the potential I'm aiming for is nowhere near tapped yet and I have a long way to go. I'm not discouraged at all because I understand, this being the genre I'm in love with, it just goes with the turf. It's part of the process, and many epic fantasy writers will fail (either through continued rejections, or indifferent readers should they self-publish) because they compromise the I need to get published instinct for I want to do this right.
But that's my set of criterion. You as a writer most likely know your genre, and as a reader and fan of your genre, you know what it is you want in your book. You also know your process and methods that help you create that book, and it's important to trust those instincts.
The important takeaway above all is that the process of channeling your inner ideal reader is a sure criterion for helping you understand if the book you're trying to complete is actually done or not, provided you belong in that group. Why is this? Because if you are a fan of a specific subgroup of book types that have sold well, then you are one of a large group of people who have read those books and want more. You are writing your book because you are creating more for that group of readers, and you, being one of them, know exactly what you'd want in a book, were you to pick it up off the shelves and read it.
The power of channeling your inner ideal reader
Are you ready to publish? Simply ask yourself if the novel you're about to send out into the world is the kind of novel you, as your own reader, would want to read. Is there anything lacking? Are you left wanting? Address that, and ask this same question, and repeat until there is nothing to do. Depending on your genre, this might be a quick process, spending an extra few days with your manuscript and booking those days off work; it might be years' long and seventeen drafts which will later win you a Hugo award (you deserve it if you stick it out that long).
Either way, know your reader, and write for your readers, because you are also that reader, and you know when your work is ready.