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In this video, viewers learn how to set up business letters in Microsoft Word. The process begins by adjusting the top margin from the default 1 inch to 2 inches. This is done by navigating to Page Layout, selecting Margins, and choosing Custom Margins to input the new top margin. Once set, the cursor will position itself correctly. Additionally, viewers will change the font style, size, and some spacing options before proceeding with the letter's content.