There is a risk in going into business with friends -- if the business relationship sours, the friendship almost certainly will end.

But what if you find yourself becoming friends with employees you hire in your business?

I have observed that young entrepreneurs becoming buddies with their employees and wasn't so sure that was a good practice.

In a small business, becoming friends with employees is a natural occurrence. A small group of people working closely toward common goals often develops friendships with each other. You all suffer together through the trials and travails of start-up and early growth, which can create strong bonds.

We know that facing common adversity is powerful for building teams. Such camaraderie can be a critical element in building a strong culture in the business and in creating loyalty among your staff.

But, it is important for the entrepreneur to keep certain boundaries as such friendships develop.

No matter how strong the team becomes, the entrepreneur is the one person who is ultimately responsible for the outcomes of the business -- the one who personally has everything on the line.

Hard decisions will have to be made at crucial points in the growth of the business. And no matter how hard it may be, the entrepreneur must make the best decision for the future of the business even if it may not be in the best personal interest of all the individual employees.

Be the 'shock absorber'

As the business owner, there are certain things you should never share with your employees.

If they have become your friends, you may feel that you can share your deepest fears about the business with them. This is a mistake.

First and foremost you are their leader. It is your job to communicate confidence and commitment to the vision, even when times are tough.

You need to be what I call their "emotional shock absorber." Your confidence and commitment will be what keeps them on task and doing what needs to get done to survive rocky times.

If you share your fears and doubts, as you might with a good friend, you run a real risk of creating a climate of hopelessness and defeat in your company.

At the end of our discussion my advice to the student entrepreneur was that it was OK to become friendly with employees, but to maintain certain limits. It is fine to socialize, but remember that you are the owner and the boss 24 hours a day, seven days a week.

It is not unlike the parent/child relationship as the child moves into early adulthood. While parent and child find their relationship can evolve more and more into one of friendship, there remains a certain boundary based on their familial relationship.

Friendships with your employees need to also have these boundaries.