INTERNATIONAL PROFIT ASSOCIATES
IPA INC.
----
500
Client: Project Number 839762-SG
YP.NET Project Plan #l
4840 EAST JASMINE STREET. December 15, 1999
MESA, AZ 8505 Page 1 of 6
================================================================================
1.0 Organization for Management
Action 1.1 Review the business operations, polices and procedures of YP.NET to
include, but not limited to: 1) organizational structure and internal
communications, 2) employee attitudes, productivity and incentives, 3)
determining management responsibilities and authorities of key individuals, to
include "marketing", "sales management/sales", "customer retention", "technical
management", "accounting/administrative", and "total company" management, with
emphasis on existing key individuals and any vacant positions, 4) developing and
implementing a plan to develop potential investor awareness of YP.NET and 5)
developing a perception of value in the common stock.
Benefit 1.1 The IPA consultants do not have preconceived notions of how any
company should "look" or "act," but instead custom develop each consulting
assignment to meet the specific needs of the individual client and client
company.
Action 1.2 Provide Bill O'Neal with a "Goals and Objectives" questionnaire
designed to elicit responses regarding company size and profitability as well as
determining YP.NET's needs in the areas of facilities, equipment and personnel.
Use the information received for organizational and budget development.
Benefit 1.2 Too often company owners/managers are so involved in day-to-day
decision making -- "fire fighting" that they forget that the company which
survives and prospers is the company that plans for the next few years as well
as merely surviving. The questionnaires are designed for Bill to complete and
discuss later with the IPA consultants.
Action 1.3 Provide Bill and other key employees with questionnaires designed to
determine the range of activities performed by the various individuals in the
company. Conduct interviews with key employees on an "as needed" basis.
Benefit 1.3 Each company has a list of activities which must be accomplished in
order for the company to function effectively. The questionnaires and interviews
are designed to provide input to the IPA consultants as to what activities are
unique to YP.NET. This is done in preparation to writing Job Descriptions and
the development of a profit-based and productivity-oriented Commission/Incentive
Plan(s).
IPA Initial RDQ YP.Net Initial:
--- -----
<PAGE>
YP.NET Page 2 of 6
================================================================================
Action 1.4 After review of the understood Organization Chart and with input from
Bill develop a management oriented Organization Chart showing YP.NET's
departments and the lines of authority. Include in the Organization Chart's
boxes, only the Job Functions or Job Titles.
Benefit 1.4 An Organization Chart is valuable to businesses of all sizes. It
provides a visual representation of the company. At this point in the
development of a more formalized organization structure for YP.NET, it is
important for all employees to understand where they fit into the company and
their relationship to Bill and to other employees. Only the Job Functions or
Titles are included at this point because the IPA consultants do not write Job
Descriptions for individuals, but instead we write Job Descriptions directed at
the needs of the company.
Action 1.5 After reviewing "understood" Job Descriptions (oral or written,
including the "understood" division of responsibilities between the key
employees), the IPA consultants will write Job Descriptions (approximately 8)
for key Job Functions, including "vacant" positions, i.e. "CFO"?, "Sales and
Marketing Manager". Each Job Description will contain Authorities,
Responsibilities, Reporting Relationships, Duties and Measures of Performance.
Benefit 1.5 Each key Job Function (including Bill's new responsibilities) and
the individuals assigned to them will now know: 1) what decisions they can and
cannot make, 2) the overriding purpose for their function to exist at YP.NET, 3)
who they supervise and who they report to, 4) their portion of that "list" of
key activities developed earlier in the program and 5) how each individual,
including Bill will objectively know if an individual is doing a "good job".
Action 1.6 Provide Bill with oral evaluations of key employees, including
himself.
Benefit 1.6 Gives Bill a third party opinion as to whether or not current
employees are capable and have the commitment to assist him to achieve his goal
of company profitability, growth and corporate direction. Also, how do we
maximize Bill's utilization.
Action 1.7 With input from Bill assign existing individuals to the various Job
Functions. The IPA consultants will install the Job Descriptions with the
Various YP.NET employees.
IPA Initial RDQ YP.Net Initial:
--- -----
<PAGE>
YP.NET Page 3 of 6
================================================================================
Benefit 1.7 In this step of the organizational development, employees' new
relationship to the company is explained to them. The goal is to delegate
through the Job Descriptions, as many as possible of the non-essential
responsibilities which Bill has assumed over time for outside sales.
Action 1.8 Review the present employee evaluation system. Make recommendations
for change "as needed" and implement approved changes. Provide Bill with the
ability to self-evaluate his contribution.
Benefit 1.8 Employee evaluations are part of the training and development of
employees; they must not be presented in a negative manner. This provides Bill
with the means of telling good employees why they are good, but also what areas
they can improve; mediocre employees can be told what they need to do to become
good employees, and poor employees can be told what they need to do to keep
their jobs.
Action 1.9 After reviewing any present incentive plans, develop and present to
Bill alternative options for incentive plans for "office" personnel. Develop
and write an incentive plan(s) designed to achieve Bill's YP.NET goals.
Benefit 1.9 Incentive plans should not cost a company money. Instead, they
should be paid out of incremental income. Incremental income is that income
which is in excess of those profits which an owner and his managers can normally
expect. The purpose of the incentive plan is to reward those employees whose
individual efforts have contributed to the level of success of the company.
Action 1.10 Review the present personnel holding key positions, determine who is
and who is not planning to stay with YP.NET through year 2000: Bill/President,
Joann Sales, Pam/CFO, etc. After identifying who does and who does not meet
criteria for the "new" YP.NET assist Bill to fill vacant positions.
Benefit 1.10 There has been considerable turmoil at YP.NET; it looks as if with
Simple.net this may continue. Personnel need to determine who is and who is not
planning to stay with YP.NET. PA will write the Job Descriptions and assist in
the selection process.
IPA Initial RDQ YP.Net Initial
--- -----
<PAGE>
YP.NET Page 4 of 6
================================================================================
Action 1.11 Review the "true" role of a Board of Directors and YP.NET's present
status. Make recommendations for a Board structure which will provide a
"positive" image of the company to outside investors.
Benefit 1.11 The legal role of a Board is to represent the interests of the
stock holders in company management. The present membership and composition in
all likelihood does not present the best possible image of the company.
Action 1.12 Review the present marketing and sales directions as well as The
potential need for additional marketing and sales efforts -- i.e. customers,
site traffic, add-on services
Benefit 1.12 Marketing is the development of the revenue goals of a company, by
product, product line, specific customer, type of customers, geographic
location, etc. Sales is execution of the marketing plan. The IPA consultant
will assist Bill to develop a three year sales and marketing outline for the
company complete with goals, due dates, and individual/departmental assignments,
i.e. customer retention.
Action 1.13 Review the present Chart of Accounts. As needed make
recommendations for additions, changes, and/or deletions.
Benefit 1.13 The Chart of Accounts is the driving force behind any accounting
system --either manual or computerized. The IPA review will be designed to
ensure that the YP.NET accounting system will be capable of measuring those
items which need to be measured and controlled by Bill.
Action 1.14 Review development of any of YP.NET's existing or future regular
reports which have an emphasis on sources of revenue, margins, and selling and
administrative costs as well as operational guideposts. Determine what Bill and
the Board need to receive in order to more effectively manage company
profitability. Train Bill to make management decisions based upon generated
information.
Benefit 1.14 Ensure that Bill and the Board of Directors are getting timely,
accurate and useful financial/operational reports by which departmental and
company wide costs and profitability can be measured and managed.
IPA Initial RDQ YP.Net Initial
--- -----
<PAGE>
YP.NET Page 5 of 6
================================================================================
Action 1.15 With an emphasis on revenues, margins and overhead costs develop
Operational Budgets -- departmental and company-wide. Utilize the budgets to
develop performance standards. This will determine projected revenues, margins,
expenses and profit for fiscal 2000. Establish the normal or average breakdown
per month and illustrate these as they compare to both positive and negative
trends in business levels.
Benefit 1.15 Budgeting and/or forecasting based on varying levels of sales
volume with their predetermined expenses will give Bill, the Board and any
managers with a "financial-need-to-know" a measurement of performance for the
company on a month-to-month basis.
Action 1.16 With considerable input from Bill develop variance-to-budget monthly
reporting to compare actual operating results to projected budget results.
Benefit 1.16 The variance reporting is designed to show various managers with
responsibilities for either operating and/or overhead expenses whether or not
they have managed their profit centers within profit projections.
Action 1.17 Train Bill how to calculate and utilize the breakeven in pricing.
Benefit 1.17 The breakeven has many uses for clients in a "high growth"
mode. Besides providing the company with sales goals, it also provides an
understanding of the profit impact from an increases/decrease in pricing.
Action 1.18 How does YP.NET market itself to the public? Review with Bill the
approach and impact of past and present public relations firms. Determine with
him the goals and deliverables of the investor-public relations firm who will
represent YP.NET. Discuss the advisability of retaining IPA's in house public
relations firm, IPA Investor & Media Services, LLC.
Benefit 1.18 Even the best run public company needs to keep its name in front of
investors, institutions and market makers. Whoever represents the company must
have a strategic plan constantly promoting the intrinsic value of the company.
IPA Initial RDQ YP.Net Initial
--- -----
<PAGE>
YP.NET Page 5 of 6
================================================================================
Action 1.19 Develop Operating Procedures and Recommendations explaining the
use of the newly developed methods, systems, records, reports and statements.
Put all documentation into an indexed manual and distribute to Bill as well as
other appropriate employees.
Benefit 1.19 Gives the consultants the means to train and implement the
installed program with Bill and other employees. Provides a permanent reference
instrument of all work performed on the project.
The above plan will be completely developed and implemented within 425 hours +/-
10%.
This is the Project Plan described in the "Agreement for Consulting Services"
Between YP.NET, Inc. and International Profit Associates.
During the course of the project, you may also be presented with suggestions
and/or Recommendations concerning other areas of your business which need
attention, but Are not addressed in this Project Plan. These will not be
developed, however, Without the full approval of William D. O'Neal and separate
and apart from this plan.
Submitted: Approval and accepted:
By: /s/ Robert D. Quackenbush By: /s/ William D. O'Neal
------------------------------- -----------------------------
Robert D. Quackenbush William D. O'Neal
Senior Project Manager President
<PAGE>
