Editing is one of the biggies when it comes to self-published fiction, and the confusing thing is that there are many kinds of editing. Terms like proofing, editing and copyediting are sometimes used interchangeably, which doesn't help.
Deanna Hoak, a freelance copyeditor, has a blog post on Proofreading vs. Copyediting which should be required reading. (This is where I must recommend Pauline Nolet, who worked on my Hal Spacejock novels.)
When talking about editing, I'm referring to structural editing, and instead of going on and on about the subject I'll just point you to Jodi Cleghorn's blog post. (Don't you just love the labour-saving hyperlink device?)
Okay, now we're on the same page. Many self-published books need structural editing, most need copyediting, and they all need proofing.
How much you spend depends on your budget, your desire to make your book as professional as possible, and your publication schedule.
Structural editing can by provided by people you know. Just get your book into their hands, warn them it's an early draft, and ask them to point out one or more of the items from Jodi's post. The important thing is to tell them you're not asking for a pat on the back (or a raspberry). You don't have to overload your readers with a big list of things to look for - maybe split the tasks so that one person is just reporting back the most boring scenes in the book, or all the places they stopped reading and put the book down, or where they stopped reading and never got back into it.
This is why structural editing can be fraught, especially if you're precious about your work (or your relationships!) It's also why you must regard this as a first draft. I can't emphasise that enough. Tell your readers you want them to tear it apart, because this is an early version of your novel which can only improve with their help.
You'll have to convince yourself of the same thing, because if you start getting defensive and arguing with your first readers, you're sunk. We all know artistes who refuse to touch a word of their perfect prose - well, us working writers suck it up and get on with it.
By the way, you can't rewrite a novel and give it back to the original first readers. Even if they agree to read it they won't be coming at it fresh, and at best they'll skim it. Instead, give it to another set of readers. If you don't have many people to ask you can always split the book into chunks, write a brief summary of What Has Gone Before, and hand each person half a dozen chapters along with the relevant summary. Next time around, give them a different half dozen.
I always promise a signed copy of the book and I mention my first readers in the acknowledgements. (Always check with them first. Some prefer first name only, some don't want to be listed.) If you're not going for a print edition, consider a one-off ebook with a custom opening page thanking the person for their help.
That's freebies, what about a structural edit you have to pay for? I've detailed the process my editor and I went through in a website article called 'Working with an editor' This was on the publisher's dime, and the work I handed in was complex and intricate and needed a fair bit of untangling. What I'm saying is, don't expect anything that thorough without a large cheque (or check.) Each pass through the book is another edit, and in the article I also mention copyediting and proofing, which are separate stages.
Simon Haynes is the author of the Hal Spacejock and Hal Junior series (Amazon / Smashwords / other formats)