I've had stories that I wrote, looked over, and said 'Yeah, it's done,' and then sent them out. I've had other stories where I wasn't quite sure, so I had people read them or posted excerpts in the SYW and got some feedback. I've sold both types of stories, so I don't think either process is better than the other. It just depends on the story.
I don't think there's a metric you can follow to know when a story is 'done.' To paraphrase The Matrix, it's kind of like being in love: no one can tell you when your story is good to go, you just know. A big part of it for me is accepting that no story is perfect, that there will always be a gap, even if it's just a sliver, between the vision I had in my head and what actually gets transmitted through my writing. Once I accepted that I stopped re-working everything to death and started subbing.