A company that fails to prepare budgets and then to use those budgets to control the business runs a high risk of failing.
A company that is well run operationally, may not be so well run financially.
As a company grows, the importance of good financial management, alongside operational management, cannot be over-estimated.
Companies use budgets and other similar tools to financially manage their business.
A budget is a financial picture of the future (perhaps on a short, medium or long-term basis).
Others may see a budget as more of a forecast or plan to which you add (or take away) money.
It could just be just a future P&L account; a benchmark or baseline.
A budget is crucial to managing the business.