What might be the effect of not establishing a budget before starting a project?

Establishing a budget before starting a project is crucial for several reasons, primarily to ensure financial control and accountability. Without a defined budget, a contractor or homeowner may encounter potential overspending, as they might not have a clear understanding of the costs involved in each phase of the project. This lack of financial oversight can lead to disputes, particularly if costs exceed original expectations without prior planning or agreement on how to address those expenses.

Additionally, failing to set a budget can result in decisions being made on an ad-hoc basis, which may further escalate costs and create financial strain. It makes it difficult to prioritize spending or make informed decisions about resource allocation, ultimately leading to stress or conflict between stakeholders involved in the project.

On the other hand, the other options do not accurately reflect the consequences of not having a budget. Clearer project goals generally stem from well-defined planning processes, which typically include budgeting as a key element. Similarly, increased profit margins and faster project delivery are unlikely outcomes of not having a budget; they are more often associated with efficient planning and financial management rather than the absence of these elements.