While writing a business letter, you should understand the basic format to be used.
Every business letter should include the sender's address. If you are writing on behalf of a company, the address will already be printed on the letterhead. If you are sending out the letter personally, the address should be centre aligned and placed at the top of the page.
The date is an important element of a business letter. This should be placed a few lines beneath the sender's address.
The next important component of a business letter is the address of the person to whom you are writing. You should leave two lines of space after the date and then type in this address. The correct format is to include the complete name of the person, the name of the company, the street address, the name of the city, the name of the state and the zip code or postal code. If the receiver of the letter is located overseas, mention the name of the country. You may also want to include the receiver's title such as Mr., Dr. etc, although many people omit this part nowadays.
The salutation comes in next. Leave two lines after the receiver's address and begin with the salutation. It is acceptable practice to use the first name of the person if you know them well. Else address the letter to Mr. X or Ms Y as the case may be. If you are not sure of the salutation to use, it is wiser to be formal rather than risk being too casual. The salutation is followed by a colon or a comma, both of which are correct.
The main body of the letter contains the message that you need to communicate. This should be written in simple, clear and concise language.
The body of the letter is followed by the complimentary close. Between the last line of the body and the complimentary close there should be a space of two lines. The complimentary close could be in the form of 'yours sincerely', 'yours faithfully', etc. Nowadays it is acceptable to end a letter merely with using 'regards' as the complimentary close.
After the complimentary close, leave a four to six line space before adding in your signature. This should be signed by hand. Mention your name and your designation beneath the signature. Normally the designation should appear in the line after the writer's name.