Levi is spot on.
When you get to the point where you have more clients than you can cope with you get to choose, to some degree, which clients you want to work with and which ones you want to turn away. See, if you do that it's unlikely that they will contact you again for another job as you bluntly turned them down. If you can tell them that either you're too busy but you know someone who can do an excellent job for them or you accept the job and outsource it to someone else then you've still helped that person with their original request. They are much more likely to come back to you in the future with potentially more valuable work or refer you to other clients who again may provide more valuable work.
And again, to expand on Levi's second point, if you send one of your friends some work then this is you doing them a favour and unless they're an arse hole then you can expect them to return that favour one day, perhaps when you need it most.