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In this video, viewers are taught how to properly set up business letters in Microsoft Word. The tutorial begins with adjusting the top margin from 1 inch to 2 inches. To make this change, users navigate to the "Page Layout" tab, select "Margins," and then access "Custom Margins" at the bottom. They input the desired top margin of 2 inches and confirm by pressing OK. After adjusting the margin, the tutorial proceeds to explain changing the font style, size, and spacing options for the document. The focus is on ensuring the letter's formatting meets professional standards before composing the text.