Everybody knows that editing is important. Everybody knows that, no matter how well you screen your own work, you need an editor. You need another set of eyes to catch mistakes that your brain won't because it knows what the words should be and not what they actually are. So what kind of editor do you need?
There are 3 standard types: content/story editor/alpha reader, copy editor/beta reader, and proofreader.
1. Content Editor
A content editor, also known as a story editor or an alpha reader, typically reads for the story. They look at the flow, pacing, things that don't make sense, holes, etc. Alpha readers can sometimes read the story as it is being written to make sure that it is flowing appropriately and that the story is going the direction it is supposed to.
Why is this important?
Sometimes we lose sight of where we're going with the main story line. Sometimes we leave out key details. Sometimes we just totally up and change the name of our MC in the middle of the manuscript. Your editor/alpha reader will catch this.
2. Copy Editor
A copy editor/beta reader will catch your grammar and spelling mistakes. They will catch where punctuation is needed or not. They will tell you where sentences don't make sense or where things need to be re-written for clarity. A copy editor will prepare your manuscript to go to layout or sometimes to print.
Why is this important?
I cannot tell you how many books, especially by indie authors, I've read that had an amazing story that was marred by bad copy editing. Misspellings and rogue apostrophes (or any punctuation) not only make your book look unfinished, it also makes you look bad.
3. Proofreader
A proofreading is the last step you want before you submit your manuscript to be printed. Ideally it should come after interior design and after content and copy editing. A proofreader is there to catch any last minute details that you or your editor missed, as well as to make sure your story looks correct in your book block.
Why is this important?
A proofreader just assures you that all your hard work is done appropriately and that you can go to print. It's not absolutely necessary, but too many edits from different people and perspectives are never a bad thing.
This sounds like a lot of editing. How much will this cost?
This is true. It is a lot of time spent reading and re-writing or correcting. According the Writer's Market (see this chart on page 5), editors can charge anywhere from $30 per hour to $150 per hour. This can become expensive very quickly.
BUT, you should take editing seriously! A poorly, or not at all, edited book has a very large chance of flopping and will never be taken seriously by publishers, or anyone interested in buying your book in bulk.
A lot bulk-buyers are "screening" what they buy now. They don't want something that looks bad, no matter how awesome the story is.
What does this mean for you?
Budget to spend a chunk of change on editing. Professional editing. I cannot stress this enough!
You can ask your best friend and your mom to do it, but unless they're a professional, there is no guarantee that you'll get good feedback. Your best chance of being successful, along with an awesome marketing plan, is to make your book look the best it can.