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In this video tutorial, viewers learn how to properly set up business letters in Microsoft Word. The first step is adjusting the top margin from 1 inch to 2 inches. This is done by navigating to the Page Layout tab, clicking on Margins, and then selecting Custom Margins to input the new value. After changing the top margin, the tutorial indicates the need to modify the font style, size, and spacing options before proceeding with additional adjustments. The emphasis is on ensuring the document meets professional standards.