Top 5 Components of a Business Letter (With Example) (2022)


This article throws light upon the top five components of a business letter. The aspects are: 1. Style 2. Form 3. Types 4. Cost 5. Presentation.

Business Letter # 1. Style:

Every creative work needs a style. The word’ style has different meanings, out of which two are rightly applicable to a business letter.


According to the Webster Dictionary they are:

(a) ‘Mode of expressing thought in language’ and

(b) ‘The custom or plan followed n spelling, capitalization, punctuation and typographic arrangement and display’. A business letter satisfies all the characte­ristics of ‘style’.

(1) The main thing is the choice of words in writing a letter. To express the same meaning different words are used under different situations. This can be demonstrated while writing successive reminder letters when the tones of the letters are becoming gradually harder. Not only the correct words have to be chosen, but they have to be arranged perfectly making the meaning clear and at the same time keeping in mind the rules of grammar.


The modern style is not to use uncommon words but to make the sentences simple. Flowery lan­guage with rhetoric’s is never appreciated. As far as possible technical words and jargons have to be avoided. Besides, superfluous, antagonizing or insinuating (causing anger), pedantic (bookish and making an exhibition of knowledge), pet or colloquial and objectionable words should not be used. ‘Just -padding’ with words without any substance makes a business letter useless.

(2) The second point to note is that the lay-out must be proper. Letters are typed out on printed sheets of letterheads. Various printing techniques are used to make the letterheads attractive.

The lay-out of a letter has the following parts:

(a) A proper form.


(b) Writing the letter leaving margins—more on the left hand side than on the right hand,

(c) Dividing the body of the letter into paragraphs. Generally a separate paragraph is allotted to each point.

(3) The points have to be arranged in logical sequence and then only the ideas can be conveyed clearly and can be impressed upon the reader. The approach shall be positive and not negative, as far as possible.

(4) A letter must satisfy the following characteristics or essentials:

(a) Clearness:


The language shall be clear so that the ideas are properly expressed and the reader can understand them in the same sense. Clarity depends on the correct choice of words and the use of simple sentences. Word shall be mentioned in full and not their — abbreviations. There shall not be any vagueness about the message or information.

(b) Conciseness:

A letter shall not be unnecessarily long. Brevity is a great quality for a good business letter. It shall be long enough to convey the ideas in full and not more than that. Neither the writer nor the reader as a businessman has much time to waste over a letter.

Writing too much means indulging in errors. A person who has com­mand over language can express things within a short compass. But brevity does not mean that there shall be want of clarity or completeness. Brevity does not also mean bluntness.

(c) Completeness:

A letter shall be complete in every sense. It must contain all the points which are necessary and relevant to the subject-matter on which the letter is written. The writer him­self shall have comprehensive idea about the subject-matter other­wise he cannot cover all the necessary and relevant points.


The points must be arranged systematically and logically and then only a com­plete and clear picture comes out. Data and statistics, if required, shall be attached as separate items.

(d) Courtesy:

A letter must be courteous. It means that there shall be a polite attitude revealed through it. A discourteous letter can never be effective and can even be harmful to a business. A courteous letter is that which is full of sincerity and free from unwan­ted pride or self-assertion by the writer. A letter is called a silent ambassador of the business. It has to earn the sympathy and favourable reaction of the reader.

It must cast a lasting influence on the mind of the reader. Even an unpleasant thing may be presented in a courteous manner. A refusal can be made in a reasonable manner and a mistake can be pointed out without hurting the other side. All depends on the choice of words and presenting them. Sometimes a letter may be lengthy for the sake of courtesy otherwise an unpleasant matter cannot be presented.

(e) Effectiveness:

Effectiveness of a letter depends on all the characteristics taken together. It is proved by the prompt and favour­able reaction from the recipient. Even the punctuations or capital letters used at the proper place have contributions to the effectiveness. While typing out a letter, the use of spacing is an important factor. Modern typewriters have elegant typefaces which make the display or appearance of a letter very impressive and effective.

Business Letter # 2. Form:

A business letter must be written in a proper ‘form’ for its effectiveness. The form of business letters has evolved through time, and out of experience, custom and exigencies. More or less the same form is used for all kinds of business letters with slight variations and in all the countries.


A correct form makes a good impression in the mind of the reader about the writer and then only the communication can be effective. A correct form can, at a glance, give a general idea about the nature of the communication.

The form a letter consists of the following parts:

(i) The Heading:

At the top of the letter following information shall be available so that the recipient can understand from where and on which date the letter has come.


It consists of:

(a) The name of the sender.

(b) The address of the sender.

(c) The nature of business of the sender.

(d) If the letter comes from a particular branch, division or department, then that also can be mentioned.

(e) The telephone number, the telex number, the telegraphic address, etc. if any.


(f) Whether any business code language is used then the particular code followed, e.g. A. B. C. or .Bentley or Leiber’s etc. Codes are used to economies words and to ensure some secrecy.

(g) The reference number of the letter. The reference number is prepared generally with the number of the file to which the letter is related.

(h) The date of writing the letter.

Generally the name, address, nature of business and the name of the branch, etc. are written (printed) at the top centre. They can be preferably written at the right hand top so that while going through the file they are easily readable. They should not be written at the left hand side top. The telephone etc., the code and the reference number are generally written at the left hand side and the date at the right hand side.

(ii) The Inside Address:

It includes:

(a) The name of the addressee, either an individual or a firm or a company or any other society or institution.


(b) The address of the addressee. In case a window envelope is used, the inside address shall be visible from out­side. Some complimentary words like Mr, Mrs, Sri (Shri, Shree), Ms, Messrs, Sarbashree are used before the name(s) of the addressee(s).

(c) Generally a letter is addressed to an important officer of the organisation like a director, a general manager, a sales manager, a partner, a secretary, etc.

(iii) The Opening Salutation or Greeting:

A letter starts with Dear Sir, Dear Sirs, Madam, Gentlemen, etc. as required under the circumstances. Such greetings are used for the sake of courtesy, ‘My dear Sir’ or ‘Dear Sri A’ may be used when there is a close personal contact with a particular person in a concern. Some­times, above the salutation some name is mentioned to whom the letter should specifically go. For example—‘Attention: Sri A’. Such mentioning of name adds some personal character to the letter.

(iv) The Subject-Matter:

The subject-matter on which the letter is written is mentioned in brief as Re: ______________. ‘Re’ means ‘regarding’. This can be written in-between Inside Address and Salutation or in-between Salutation and the Body of the Letter.

(v) The Body of the Letter:


This is the main part of the letter containing the information, viewpoints, facts, message, etc. or the main purpose for which the letter is written. The body of the letter is divided into paragraphs, each paragraph dealing with a particular point or topic or aspect of the subject-matter. Sometimes, for con­venience, the paragraphs are numbered.

The body of the letter has the following sub-parts:

(a) Introduction of the subject-matter with or without reference to any previous communication. Sometimes there is self-introduction of the writer. The introduction shall be very brief, either a sentence or a small paragraph.

(b) The middle portion elabo­rating the subject-matter. This shall be divided into paragraphs based on points,

(c) The closing portion of the letter with rounding up the whole theme asking from the reader any suggestion or action or making any suggestion or advice from the side of the writer. There is a wishing too for courtesy’s sake.

(v) The Complimentary Close:

The letter is generally ended with a complimentary close using some standard phrases or sentences like ‘Yours faithfully’, ‘Yours truly’, ‘Yours very truly’, ‘Yours sin­cerely’, etc.

(vi) The Signature:


The letter shall be signed by the writer by his own hand but below the signature the name may be typed out within brackets so that the reader can know the name (as the signature may not be legible).

The signature must be accompanied with:

(a) the name of the concern for whom the letter is being written (this is given above the signature).

(b) the designation (i.e. the position officially held) of the person making the signature (this is given below the signature) to ensure the authenticity of the signature. The status of the signatory has great bearing on the importance of the letter. The signature is usually at the right hand side bottom of the letter.

(vii) Enclosures:

If any paper, cheque, draft, etc. is attached to the letter, it has to be mentioned at the left hand side bottom corner of the letter stating the number and the nature of the enclosure(s). In short it is written as ‘Encl:’.

(vii) Postscripts:

After the letter has been completed, if any new point comes up in the mind of the writer which he thinks shall be included, he adds it under the heading: Postscripts (or P.S. in short). This is, however, is not a good practice. It is better to re-write or re-type the letter. The writer shall initial his name at the end of the postscripts.

(ix) Initials:


At the extreme left hand side bottom corner, the typist types out his initials. This is necessary because if there is any fault in typing it can be found out who was the typist, particularly when there is a typists’ pool.

(x) Copy:

Sometimes a carbon copy (or copies) of a letter addressed to a person or party is (or are) sent to another person or party (persons or parties) for reference. This is more common in internal communication when copy or copies of a letter to be sent to another department or departments. In such cases at the bottom end of the letter the name or names of person or party (Or persons or parties) is (are mentioned) with the mark c.c. i.e. carbon copy.

Business Letter # 3. Types:

Business letters are of various types since letters are written on various topics, on various occasions and under various circumstances.

Different letters are meant for different types of people and with different purposes. Business letters are primarily grouped into Circulars and Letters. Circulars are not meant for individual or specific persons or parties. They are meant for a large number of persons or a big group or the public at large.

For example, a common circular is sent by a manufacturer to his dealers informing them, changes in the terms of dealership or prices of the goods. Circulars may be sent to the customers directly. In a process of campaign advertisement circulars may be sent introducing a product to a large number of people taking their names and addresses from the telephone directory.

Letters are meant for specific persons or parties dealing on some specific subjects and are sent individually. Some­times circulars are attached with self-addressed and even stamped envelopes so that the recipients of the circulars can without any effort or cost send replies. Business Reply Cards also come into this category. Instead of sending self-addressed envelopes, self-addressed cards are sent which do not require postage stamps because the sender pays for the postage stamps in advance and gets a licence for issuing such cards from the post office on payment of fees.

A licence number given to the sender is printed on the cards. Besides this classification, we also find Form Letters. These are standard replies sent against common enquiries. Such letters are signed by junior officers or even by office assistants and have less importance.

Business Letter # 4. Cost:

It is very difficult to calculate the cost of a particular letter pre­pared and despatched from the office. The cost is not so low as it appears. It involves two types of cost, monetary and real, and the real cost has a money value.

Taking both the aspects of cost the following items of cost can be enumerated:

(1) The cost of stationery—paper, clip, pin, carbon paper, envelope, etc.

(2) Installation, operation and mainte­nance costs of the machines used.

(3) Costs of wastages made of sta­tionery, if any.

(4) Postage.

(5) The salary of the clerks, stenographers, typists, etc.

(6) Cost of filing of the copies.

(7) Cost on the space occu­pied by the correspondence department, placing of machines, etc.

(8) The time consumed by the officers making the plans before writing and dictating letters.

(9) The general overhead cost of the office for lighting, rent, etc.

It is desirable that proper control shall be there so that the cost is minimised. On the whole a large part of the total office expenses comes out of the correspondence work. Use of machines saves time and cost. Form letters also contribute to the reduction of time and cost. Cost can be reduced by eliminating unnecessary correspondence. Control on purchasing of stationery indirectly reduces the cost.

Business Letter # 5. Presentation:

The presentation of a letter is a vital matter in correspondence. Letters must be elegantly presented. The quality of the stationery used, of the printing of letter heads as will as of the typing must be of high standard. Generally different qualities of stationery are used for different kinds of letters.

The quality of printing (use of a number of colours, use of dies, etc. on the letterheads) also is varied. Even proper folding of letters adds elegance to them. Big business houses continue to use a particular colour (or colours) of ink for printing of all letters. It is called the ‘house colour’ and it helps to create goodwill.

Sketch of the Lay-Out or Form of a Letter:

(A) = The heading.

(B) = The inside address.

(C) = Dear Sir, etc.

(D) = Re

(E) = The main body of the letter divided into paragraphs.

(F) = Yours faithfully, etc.

(G) = Signature on behalf of the sender with the designation of the signatory.

(H) = Enclosure.

(I) = Initials of the typist.

(J) = c.c. or carbon copy.

Related Articles:

  1. Business Letters: Meaning, Qualities and Layout
  2. Drafting a Letter: 3 Main Procedures

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