Without a budget (plans for how you're going to use the income your business generates and meet your financial obligations) you won't know where your money is going, or when. You need to be able to pay your debts, plan for emergency expenditures, make payroll, pay taxes, plan for income generation...without a sound budget, your business could soon become defunct.
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Budgeting is a basic element of business planning, enabling work to be planned effectively and resources to be better allocated. It is necessary for monitoring success or failure, controlling costs, and planning for expenses and income during the financial year.
As sonnet26 so rightly said, without a sound budget a business would be heading for certain failure.
