As the old adage goes, you can't pick your family, but you can pick your friends. The same thing it true of hiring a team, you are ultimately in control of the team you build. In a previous life, organizations were loyal to the end rewarding employees with pensions and lifetime benefits. Small business tend to offer 'friendly' atmospheres. No matter the size of the business, there is one key factor to success: the human capital.
Organizations that spend their resources on employee development tend to get a higher payback. For smaller organizations, every hire is critical. Most organizations take on the personalities of their owners, and some even create a monoculture.
Hiring is strategic, employees should add value to the team and help you achieve your goals. Google has some great ideas on hiring the best and brightest, and their practices demonstrate that. As my post on strategy and planning mentions, corporate goals should impact all decisions. It is very important for executives to understand the strengths and values of their team members [especially in a small company], how much they can grow and where the plateau is. Once you identify the individual and corporate ceilings for the employee, determine if they still make sense as a member of your team. Can they contribute or are they adding extra weight? Don't be afraid to part ways if an employee inhibits revenue generation, your growth, or your goals.
Although we aim to be friends with our coworkers; at the end of the day the goal of your business to make money while still being fair. It's not fair to you or your employees to continue the business relationship when you don't have the right fit.