Steps

1. Use the appropriate letterhead. This should carry the company’s address and the name of the person who writes the letter. In the absence of such a company’s letterhead, A4 white paper will suffice. In that case, the complete postal address of the company and the name of the person who writes the letter should be clearly mentioned. The absence of this information will create suspicion in the addressee.
2. Include the date so that the letter will be kept for future reference. This date will give the addressee a fair idea about the urgency, if any, of the matter that the letter carries.
3. Add the address of the person you're sending the letter to.
4. Include a reference number, if necessary (if the letter is in response to any other previous letter, the date of the previous letter can be treated as the reference number). In the absence of the reference number and in the case of drafting a new letter, you should mention in the first paragraph the subject matter of the letter.
5. Use a proper salutation: Dear Sir/Madam works well.
6. Introduce the topic at hand in the first paragraph.
7. In the next paragraph, write the subject matter clearly in a simple language and in an unambiguous style. Since a business letter is only a tool to make few business-things done, brevity is what all the business-people expect in the letter that they receive.
8. Be brief and direct in your communication. Whether you purchase goods or you introduce your company or you bring the mistake in the accounts to the attention of the addressee, you should be brief.
9. Use the final paragraph to wind up the letter. Never hesitate to be forceful in your communication. Any lethargic approach will not be tolerated by the addressee. Only forceful and firm people are respected by the eminent business people.
10. Use the correct form of leave-taking. Yours sincerely and yours cordially are the widely used forms of leave taking. Use any one of them.
11. Add your signature in the proper place. The letter without the signature of the writer will be treated by the addressee. It carries no weight. Please keep in mind to add your official signature before you put the letter in the postal cover.
12. Check the spelling of your letter. You can at least use your computer to do this job. But do not rely on the computer software -- read it over yourself.
13. Use a clean and appropriate envelope, preferably with your business' name on it. Write the addresses of your addressee and yours in the appropriate places.
14. Paste adequate stamps. If not, the letter may bounce.

Tips

• Make your letter a computer typed one so that if your hand writing is not readable, that will affect the effectiveness of the letter.
• Use a quality pen to sign the letter.
• Post the letter in time.
• Be Responsive - If you are responding to or with a letter, address the inquiry or problem. Most of the time, companies rely too much on a handful of form letters to answer all situations. This shows that you do not understand their needs. When you considered you reader as above, you will be able to respond to them.
• Be Personal - Letters are written by people to people. Don't address it "to whom it may concern" if it is possible. Whatever you do, do not use a photocopied form letter. Please see how to use a form letter for the proper use of form letter if you have to use it. You cannot build a relationship with canned impersonal letters. But also don't be too informal. Avoid using colloquial language or slang such as "you know" or "I mean" or "wanna".
• Be concise and to the point - When writing business letter, explain your position in as little words as possible. Spell out what you can and what they need to do. Use clear and easy to understand language so that any misunderstanding can be minimized. Think before you write. Ask yourself why you are writing? What is it that you want to achieve? Use this 5 step process:
  1. List out the topics you want to cover. Do not worry about the order.
  2. In each topic, list keywords, examples, arguments and facts.
  3. Review each topic in your outline for relevance to your aim and audience.
  4. Cut out anything that's not relevant.
  5. Sort the information into the best order for your readers.
• Be friendly, build the relationship - Don't use cold, formal language. Some people have the perception that when writing business letter, they must big words. To them this is a sign of literacy. Some 'big words' have no substitute, but do use the word correctly. You want the reader to feel like they are reading a letter from someone who cares.
• Emphases the positive - Talk about what you can do, not what you can't. For example, if a product is out of stock, don't tell the customer you are unable to fill the order, instead, tell them the product is very popular and you have sold out. Then tell them when you can get the order to them.
• Stay away from negative words. For example, your complaint about our product, instead, sorry our product was not up to your expectations.
• Be Prompt - If you cannot respond fully in less than a week, tell them so and say when they can expect a respond from you.
• Check Spelling, Grammar & Facts - Always make sure you are 100% correct in spelling, grammar and facts. Use the spell and grammar checker from your word processor.