I Have No Idea How To Hire An SEO Company

I am a small business owner in Berkeley and I am having a very hard time keeping up with my competition. I have been in business for years, but it seems like all of the new people in the area are doing far better than I am. A friend of mine told me that the key would be to go out and hire an SEO company to help me. This may be solid advice, but the reality is that I have no idea how to hire someone for a service like this.