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In this video tutorial, viewers learn how to set up business letters in Microsoft Word. The first step involves changing the top margin from 1 inch to 2 inches. This is done by navigating to the "Page Layout" tab, selecting "Margins," and then choosing "Custom Margins" to adjust the top margin to 2 inches. After applying this change, attention shifts to adjusting font style, size, and spacing options. The tutorial emphasizes making these initial adjustments before proceeding with typing the letter to ensure proper formatting.