Potential customers are more likely to do business with you if you have a professionally designed logo because it builds trust. If your logo looks like it was created in Microsoft Word, people will wonder how well you are able to deliver your core business products/services.
A logo is a combination of text and graphic imagery that serves two purposes. It tells people the name of your business and it creates a visual symbol that publicly identifies your company. Designed well and with the right marketing, a logo can create an association between people's memory and your business.