How do you know when it's ready to submit?

When I'm 90% happy with what's on the page, I tell myself it's time to send it out. If you wait for it to be perfect it will drive you insane...

I usually have a few beta readers, which allows me to cross-reference their suggestions and gives me more feedback/viewpoints for improving the MS. But, if you only have one beta reader (that you trust--probably best to not be a family member, SO or BFF), then you just need to make sure it's as polished and edited as can be. When you are at the point where you are just nitpicking word choice or rephrasing sentences but not doing anything to change/fix the plot, add character development, add/subtract subplots, etc, then you are probably ready.

Given enough time away from a project you will always find something new to pick at or revise. Having a good beta-reader (or two) can help you see larger issues with the plot - assuming they are familiar with your genre, understand the craft of storytelling and are able to communicate with you in a positive fashion. (This will vary between each reader/author, and sometimes between each reader/novel.)

The big issue is always, are you comfortable with the novel? And the best way to be certain of that is to let it sit a little while and then go through it again.

I let mine sit for a bit while I wrote the query letter, then made more tweaks, then started querying. As it turned out, I still did a major revision for the agent I signed with even after querying with what I thought was the best I could do.

The best we can hope for is to have done the best we can at that point. (In another six months we might do better, but that's a natural side effect of writing steadily - you improve with practice.) Once you are satisfied that any other changes are just nitpicks, start sending it out. You may gain new perspective later, but you may not. Don't sit on a project just because you might figure out something better in another six months or a year.

I have four beta readers, usually two to a project (they like different things). Like Aggy, I cross reference their comments. I listen to my agent and, when I have them, to my editors.

Even then, I know the project is never truly perfect. I see things I want to change in my debut novel, published over two years ago. My agent found seven small flaws in a new mms I sent a month ago. After fixing those and sending it back, I found new format errors. Should a publisher bite, I'm well aware there will be more flaws and revisions.

It doesn't have to be perfect. It has to be somewhere in the zone between just-good-enough and damn-good. If my early, pre-submission efforts can push it more toward the latter category, I'm already ahead of all the authors who settled for the former.

It's ready when you can't find anything you can make better. Not before.

But be careful with beta readers. I don't care if you revise a thousand times, beta readers will always find something else they want changed.

Yep. You're writing the thing. They aren't. It's the same reason not to workshop a query or novel to death: at some point it stops being your voice.

The key is in knowing when what the betas say is making it better and when the changes just make it different.