Think of beta readers as your pre-reviewers. Would you rather have a reader tell you—in a scathing review on Amazon for all the world to see—that your book has plot holes, typos, and awkward phrases? Or would you rather have a beta reader tell you—in a much gentler, more constructive fashion—prior to publishing?
Beta readers can be literal friends: people you know well, who are willing to take a look at your book and tell you what they think of it. Beta readers can also be strangers: perhaps fans of your previous work, if you’ve already published. They might simply be fans of the genre in which you’re writing, and love to see books before anyone else does. Either way, they’re your golden opportunity for honest feedback in order to iron out any problems prior to showing your work to the world.
Whether you use a paid beta or a freebie, keep in mind that the closer someone is to you emotionally, the harder it will be for them to tell you if there are flaws in your manuscript. Family and close friends are wonderful cheerleaders, but an uninvolved party will probably yield better results for the work itself.