The family friend
You’re tempted to say: “I would have fired you months ago if I weren’t so nervous about seeing you at family functions.”
Instead, say this: “I need to end our business relationship for these specific reasons, but I hope this does not affect or damage our personal relationship. I know this might reflect on our personal lives, so let’s talk about it.”
It’s important because, while you typically don’t want to invite long conversation when firing a client, firing a friend or family member requires a different etiquette. Since the relationship is not ending entirely, you want to give them the option of airing any grievances and arguments now, rather than at the next family party.
Keep in mind that you’ll need to establish some guidelines on your future relationship, whether it’s agreeing not to talk to mutual friends about the situation or setting a time to see each other personally. While you are taking ownership of ending the relationship, let them take the lead on how to reconnect on a personal level.