problems with SEO friendly url structuring

i have installed seo wordpress plug-in by yoast to my website http://localmarketingdude.com and all the seo attributes like meta title, description, keyword, setting up fetured image are all working fine.
The problem that i am facing , i want to change the url structure to seo friendly so i changed the url structure to be post name. after that i get 404 server error and when i revert back to the default url assigned by word press then it works fine.
i would like the post url to be seo friendly with post name in the url so anybody suggest me how i can fix this problem.