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In this video tutorial, viewers will learn how to properly set up business letters in Microsoft Word. The first step involves adjusting the top margin from 1 inch to 2 inches by navigating to the page layout, selecting margins, and clicking on custom margins. By entering '2' for the top margin, users can quickly adjust it. Once the margin is set, the tutorial indicates that further changes will need to be made regarding font style, size, and spacing options, preparing users for a well-formatted letter before typing begins.