Staff misbehave, we all do as we are ultimately all human.
That said you need to remember that ultimately you too are an employee of the business and you need to make decisions that are in the best interest of the business itself.
Ideally you have some documented processes for how to manage staff. Even when I say documented, I fall asleep, but the point is having something pre-prepared means it's simple and easy to follow so there is less thinking required and less emotion too.
The reality is that getting to a point where things are documented is probably only needed when you start to have managers between you and some staff.
In the meantime the thing to do is realise that just like evolution itself you are building up how you want to handle different situations and over time you will build to having managers, from which it's easy to then build a staff management system.
In the case of misbehaving staff - obviously talking about it with your coach is a critical thing to get some objectivity.
Not allowing the business owner to get pushed around.
Not allowing the business owner to confuse friendship and staff relationships is critical too.
Not directly advising the client on their legal obligations - especially with hr rules in so many states and countries - reminding them to check is important.