4 Essential Business Letter Types Companies Need to Use (and How to Write Them)

Effective communication is an integral part of running a business. Whether it’s sending out a memo within the company, reaching out to prospective clients, or dealing with other companies, having a formal and clearly structured way to send letters can make everyone’s lives easier and significantly improve efficiency.

Because of that, understanding the essential business letter principles is something that should not be taken lightly. 

After all, when you send out a letter as a business, you are not only communicating information but are also showcasing what your business represents. And being professional should be a vital part of the image you want to uphold.

With that in mind, let’s look at the most critical aspects of business letter writing, including what it is, why these types of letters matter, and the most common types of letters you are likely to be sending out. 

What is a Business Letter?

A business letter is any communication that is sent out by a business. It can come from individuals within a company but as long as they act as representatives of the company they work for. 

Over the years, business correspondence has evolved into a consistent format, with specific rules and best practices used by companies in all industries.

And even though some companies may decide to break those rules, business communication is all about efficiency. In most cases, it makes sense to stick to the established practices that the recipients of business letters expect and can quickly scan.

But because of the same rules, those with less experience in business correspondence may find creating professional-looking letters overwhelming and complicated.

Knowing how to start, what information to include, and what language to use can all seem overwhelming until you get some practice and see more examples of how other companies approach the process.

The good news is that in most cases, business letters are designed to be as straightforward as possible, so learning how to use them effectively shouldn’t be too difficult.

But before we get into the specifics of essential business letter components, let’s go through a few reasons why they’re important. 

Why Are Business Letters Important?

Why Are Business Letters Important?

There are many reasons why business letters are an integral part of running a company. Let’s look at the most important reasons below.

Clear Communication

The clear and concise structure of business letters means that they are an excellent communication tool. 

The familiar format and comprehensive additional information in these types of letters make it much easier to convey your message and increase the likelihood that the recipient will actually go through it.

Helps Maintain Relationships

Your business is only as strong as the relationships it can build and nurture. Whether it’s with clients, business partners, or even employees within your company, having a way to communicate politely and professionally can go a long way in ensuring that nothing gets misinterpreted.

Proof Element

Business letters can have the power of acting as proof, which makes them essential should a dispute arise in the future.

Unlike communication by phone, business letters can be looked up and accurately dated, making them very useful when you need to sort out the details and get to the bottom of a situation.

Essential Business Letter Components

If you want your business letters to become a useful communication tool, there are some rules that have been proven to make most business correspondence better.

Even though there’s a long list to consider, it can usually be boiled down to a few essential aspects:

  • Be clear. Business letters must get to the point and use simple and straightforward sentences to be understood. Using short sentences and avoiding less-known jargon are good starting points when creating business letters that get read.
  • Follow formal rules. It’s also important not to become too familiar in situations when that is not warranted. Stick with the common salutations and avoid unusual punctuation or exclamation points. 
  • Address people correctly. You should always err on the side of caution when it comes to addressing someone. If you’re unsure how to spell their name or what title to use, use gender-neutral and more general phrases that won’t offend.
  • Use a logical structure. One of the main goals that business letters have is to communicate the most crucial information. And that means you should follow a logical structure such as the classic 5W’s structure that people are used to and expect. 
  • Add a call-to-action. No matter what type of letter you might be sending, you should almost always have some sort of call to action. Whether it’s to reply or do something else, think about how to convey that CTA in a professional yet persuasive manner. 
  • Proofread! Finally, business letters are not the place to make silly mistakes. You are trying to look professional, so check and double-check to ensure there are no blunders and your letter looks good.

Types of Business Letters

Even though there are countless letters a business might write, they can usually be grouped into a few essential business letter categories. Each of these categories has its own characteristics and purpose, which makes mastering each style equally important. 

Let’s look at the business letter types below. 

Sales Letters

When thinking about the different types of business correspondence, sales letters probably aren’t the first thing that comes to mind. But in many cases, they can meet all of the criteria of a business letter because they also follow similar principles, even though there are clear differences from other types as well.

However, it’s important to understand that in this case, the term sales letters is pretty broad. 

Sure, it can be a direct sales letter you send out to your list of customers, but it can also cover marketing-related messages, discount announcements, and anything else that has the goal of driving sales.

Formal Letter

When communicating with other businesses, you will be sending plenty of formal letters that need to adhere to a certain format to be effective.

Whether you’re negotiating with suppliers, sending invites, or even reaching out to another company with a business proposal, you need to have a proven method for including all of the vital information that the letter must contain.

At the same time, the letter must be brief enough not to become unfocused, as you want to make sure that your letter’s core message gets read and understood.

One thing to keep in mind when creating formal letters is that you should begin the message with a brief introduction and the gist of what you want to say. Also, include contact info and credentials so that the person on the other side knows who they are talking to and how they can respond. 

Circular Letters

Circular Letters

As a business, you must have an effective method for getting important news out to the public. And a circular letter is one of the best ways to reach a broad audience you want to inform about changes within your company.

For instance, if you are rebranding, sending out a circular with an announcement is essential if you want to avoid confusion and make sure that the majority of people you work with and sell to know how you’ll be called from now on.

Similarly, when you’re moving to a new office, it’s important to inform other companies you work with to avoid frustrating and costly misunderstandings.

Internal Letters (or Memos)

Finally, some of the letters you send out won’t even be intended for people outside your business. But if you’re a growing company with an increasing number of employees, having an efficient method for informing employees about changes and news can make a big difference in how your company operates.

Letters within your company can be meant for the entire workforce when you need to announce something like a policy change. For instance, you might send out an internal letter informing the sales team that you will start using done-for-your marketing to drive more traffic to your site. 

However, they can also be meant for groups of employees or even individuals, informing them of changes, news, or plans that they should know about.

If you want to promote a team-oriented culture in your workplace, having a reliable way to communicate via letters can help make interactions more effective and open. 

Bottom Line

Creating consistent and informative business letters isn’t always easy. But only companies that master this essential skill can expect to avoid costly misunderstandings or even damage to their reputation.

What do you think are the essential business letter principles? And what matters the most when sending them? Share in the comments below!

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