Excel has loads of built-in functions, however, you may need a function yourself that you need regularly that is just too difficult to create using a regular formula. It could also be that you want to use an IF function but you are limited by the number of IF conditions allowed.
A custom function gets around that. You may also want to have the function available to all your workbooks or distribute them to your colleagues or classmates.
In this video tutorial you will see how to create a custom function with one argument to get you started.