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"But wait on a serious note why is it bad to do business with friends?", she asks him.

"Well, that is because money doesn't mix well with friendship. So here is the thing when you do business with people who don't know you on a personal level they will take you seriously.

Your friends know your weak spots and they know you care about them. A friend will make a mistake that will maybe cause harm to the business but k ow that you will go soft on them.

Whereas a person you don't know on a mother level won't do this. To them the business is important and they can't risk that by trying stupid things. 

When a friend goes behind your back and takes a better deal that will benefit them your feelings will get in the way. You will be thinking why did they do that when we are friends?