Decide what type of editor that you need. There are three main types of editor: developmental, substantive and copy. A developmental editor works with you to create your manuscript from initial concept through drafts and to completion by writing a critique of the characters and plot. Substantive editors identify and help you solve problems of manuscript clarity, section reorganization and rewriting of manuscript segments to improve readability. This type of editor will, for example, spot inconsistencies in the manuscript's storyboarding or use of time sequence in the narrative. A copy editor corrects spelling and grammar, ensures style consistency, notes permissions required for any material that may be copyrighted to another author and fact checks. Book editors also sometimes compare the last draft of the manuscript for discrepancies in the text and check, for authors who are self-publishing, difficulties in page layout or manuscript font.
Research book editors who have worked with your genre. It does not make sense to use an academic book editor when you have a manuscript that you hope to sell to a publisher of fantasy books. Find the genre editor you need by attending trade fairs and writer conventions or get referrals from authors who have been published in your genre. Research the clients the editor lists on his or her website.
Read the books the editor has managed. Evaluate for proofreading of grammar and spelling, the consistency of time sequence in the narrative and the overall flow of the text. Decide if the editor can do basic tasks like proofreading and is capable of choosing those projects with writing that engages you as a reader.
Research the sales generated from the editor's clients. Take into account how well-known and lucrative the books are that the editor shepherded to market, or the failure of the books to sell. Hire a book editor who has successful authors.
Look at the editor's contract and pricing. The primary goal is to keep copyright to your manuscript. Never sign away any rights to your book. Compare services and prices between editors for specific needs such as proofreading or conceptual editing. Be wary and do not hire an editor who misleads you by exaggerating the market potential of your book. The publisher and readers will decide if your book will survive, or not.