Spend a little time understanding why pages appear high in Google's rankings.
This is a good place to start. You don't need to spend much time on this but it will be time well spent when you start interviewing potential suppliers as you'll be able to ask them how they will approach the work on your site.
Armed with your background understanding you'll be able to weed out the out and out scammers. Ask some tough questions based on your research and if you don't understand the answer or if you smell 'waffle' consider moving on.
Treat any guarantees with suspicion but in particular run a mile when offered a set number of forum posts/directory submissions/links in general for a set fee.
Perhaps most important of all spend some time looking at the sites you believe you are competing with. Be really honest with yourself and ask if your site is on a par or preferably better then these sites. Ultimately Google is trying to position sites showing its users the best sites first (it's arguable they achieve this) so no matter what an SEO company does, if your site is poor in comparison to your competitors any gain could quickly be lost if Google's quality team have anything to do with it.
Very often people get ripped off in business, and other walks of life, because they choose to believe the unbelievable. They choose to believe the builder who quoted 50% less than the others, they choose to believe the advert for easy peasy slimming pills, they take the too good to be true option even when they know deep down it's dodgy.
The basic concepts of SEO are simple. In response to a search Google shows pages that are relevant (content) and authoritative (age, size, link profile, social profile etc). Good SEO companies tend to want to help you create a resource that deserves to rank. They will talk about content, they will look for ways to improve your website, they will want to ensure your site is relevant to the people you want to attract.
So in summary do some research using trusted resources, be realistic when comparing your site with the sites you want to out rank, avoid services based on packages of links, trust your gut and engage a company who talk to you in language you understand.
Hope this helps.
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