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In this video tutorial, viewers learn how to set up business letters in Microsoft Word. The first step involves adjusting the top margin from 1 inch to 2 inches. This is done by navigating to the page layout, selecting margins, and then accessing custom margins to update the top margin setting. The cursor automatically adjusts to reflect the new 2-inch margin. Next, the tutorial indicates that viewers should change the font style, size, and spacing options as needed before continuing with further adjustments.