Should you be the boss, the boss-friend or more of a friend then a boss?
The answer will and should always be: "You should always take the roll of THE BOSS" (if that's who you are) at work.
To avoid conflicts and unnecessary arguments in the future, it's better for you both if you sit down, (no matter if it's a friend or someone you don't know that you are about to hire), and set the ground rules for your soon to be working relationship from the start.
If your employee knows what you expect from them from the beginning then you are less likely to run into problems down the road.
YOU ARE THE BOSS
You should keep in mind that you are their boss first and that your friendship from now on will come on second place. Then think twice, is it worth hiring a friend and take the chance of loosing that friendship.
FRIENDS OUTSIDE THE OFFICE
It can be hard to keep up the appearance of "boss and employee" at work if you have a friendship going on outside work. This could end up being more of an headache then you asked for.
Ask yourself is it worth it.
ADD TO THE FRIENDSHIP
Don't let other coworkers feel left out. Include everyone at the workplace in this friend circle of yours. To avoid conflicts and jealousy treat everyone the same.
Do not get to personal, no matter what you think being friends make being the boss so mush harder. It's at tip tap toe dance around the do's and don'ts.
Keep your social media accounts to yourself.
I could go on and on about this boss and employee friendship and how to handle it, but to me personally its a big NO NO. They almost never end well and you are the boss for a reason. There is a reason why they say don't mix business with pleasure.