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Business 101: Writing a Formal Business Letter

Business 101: Writing a Formal Business Letter

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How you present yourself and your business in a letter speaks volumes about you and your company. Constructing and formatting your letter is one of the most important pieces of formal business correspondence. In this guide we will show you formats by indicating what goes where, rather than giving you actual sample letters and memos.

Formal Business Letter Format

Salutation. Given the informality of business in the United States (in contrast to Europe and Asia), it’s often acceptable to use a first name simply on the basis of having spoken with the person on the phone. If you don’t know the person, however, use “Mr.” or “Mrs.” or “Ms.” plus the last name.

It’s always best to write to a specific individual, but if you don’t have a name of a person, use “Dear Sir:” or “Dear Sir or Madam:” rather than the somewhat old-fashioned “Gentlemen:” which may be considered gender-biased.

Paragraph. Another format that is now considered old fashioned is the indented paragraph. Today, nonindented (or “flush”) paragraphs are considered the standard.

Whether you use ragged or justified right margins is largely a matter of personal taste, subject to the custom in your organization. I prefer ragged right and I believe most readers do. I also see it far more often. The ragged right margin creates more white space and a less “boxy” and more inviting look.

Here are two examples of a formatted letter. Note that the first example has a ragged right margin as opposed to a justified right margin (which can be seen in the second example).

The ragged right margin creates more white space and a less “boxy” and more inviting look.

Example one.

If you do use justified right margins, use a proportional font (such as Times New Roman) rather than a nonproportional font (such as Courier).

Example two.

Font. If you do use justified right margins, use a proportional font (such as Times New Roman) rather than a nonproportional font (such as Courier). A proportional font automatically adjusts the spacing between the letters in a word so that there are no gaping spaces between the words in a line. A nonproportional (monospaced) font can’t make this adjustment, so you wind up with some large spaces between the words when you use a justified right margin.

The spacing between words is not an issue with a ragged right margin, which is another good reason to use ragged right margins in your letters and memos.

Closings. Besides “Sincerely,” the accepted closings for a business letter include “Very truly yours,” “Yours very truly,” “Yours truly,” and “Very truly” all of which are considered more formal than “Sincerely” (which I prefer and most often use). “Cordially” is still more informal. “Regards” and “Best wishes” can be used for a personal touch when you have a personal as well as business relationship with the reader and the subject matter is somewhat personal.

Personal Business Letter Format

The following example shows a letter formatted without letterhead. (This kind of letter is sometimes called a personal business letter to distinguish it from a business letter, which goes on letterhead.)

This kind of letter is sometimes called a personal business letter to distinguish it from a business letter, which goes on letterhead.

You would use this format if you were writing to a company from your home. But even so, with a computer it would be easy to create personal letterhead, as in the following example:

Just as computers have created the standard of zero errors and no cover-ups or erasures, the reasonable standard has become some form of letterhead done on a computer.

Just as computers have created the standard of zero errors and no cover-ups or erasures, the reasonable standard has become some form of letterhead done on a computer. From the practical standpoint, this makes the inside address positioned to the right obsolete. However, I include it here because it is acceptable, and—who knows?—someday you may find yourself without access to a computer and the need to write to a business from your home.

Paper Size and Margins

The standard size for paper in the United States is 8 ½ by 11 inches. Do not use legal-size paper, which is 8 ½ by 14 inches, for business correspondence.

Proper margins for a letter or a memo are from 1 ¼ to 1 ½ inches on the right and left sides.

Letterhead can begin from ½ inch to 1 ¼ inches from the top of the page. This also applies to any other typing at the top of a page, such as the page number lines, but not to the text itself, which should be 1 ¼ inches from the top or two lines below the page number lines.

The “To” and “From” lines for a memo should begin from 1 to 1 ¼ inches from the top.

The bottom margin should be from 1 to 1 ½ inches.

In practice, most of us who work with word-processing software on a personal computer use the default settings for margins, which on most packages are 1 ¼ inches on all four sides. The default setting on a computer is the setting that the program automatically uses unless you manually override it.

Customary Layout of Extra Information

Often in a business letter, several lines below the closing, signature, name, and title of the sender, you’ll see two sets of initials, separated by a slash, at the left-hand margin, for example:

This means that the document is from Thomas F. Gorman and that his secretary, Mary Celia McCaffrey, did the typing.

This means that the document is from Thomas F. Gorman and that his secretary, Mary Celia McCaffrey, did the typing. This is formal practice for a secretary, and I include it for that reason.

If you are enclosing an attachment or additional information with a letter, it is customary to note that fact after the closing, signature, name, and title, as follows:

f you are enclosing an attachment or additional information with a letter, it is customary to note that fact after the closing, signature, name, and title.

or:

f you are enclosing an attachment or additional information with a letter, it is customary to note that fact after the closing, signature, name, and title.

Finally, you will often need to use a “cc” or distribution list to send out multiple copies of your document. Here’s where the “cc” or distribution list would go in a business letter:

Finally, you will often need to use a “cc” or distribution list to send out multiple copies of your document.

or:

Finally, you will often need to use a “cc” or distribution list to send out multiple copies of your document.

If the attachment or enclosure is integral to the letter, you would include it for those on the “cc” or distribution list as well. If it’s not integral, it would be acceptable for those people to receive just the letter.

Following these basic rules, you can format any kind of business letter or correspondence. Happy writing!

From The Complete Idiot’s Guide to Business Letters and Memos, Second Edition, by Tom Gorman