Click on 'Insert,' again at the top of MS Word. When the menu appears, let your mouse arrow hover over 'Picture.' Here you'll have several options. You can create your letterhead on the fly using some of those options. However, for our purposes we'll opt to choose 'From File,' since we already have a ready graphic. Click on the option, 'From File,' and a dialogue box opens. Locate your graphic and then click on it and then click the 'Insert' button. Your graphic will then appear inside the dotted box.
But first, let's learn how to create a business letterhead in Word. You only need two things: Microsoft Word and a ready graphic, preferably not wider than 5 inches and higher than 2. In other words, not larger than 5x2 inches. This is, of course, ideal but not necessarily set in stone. Let's begin. Fire up your MS Word. I'm using MS Word 2003 and you might have a different version, but I believe there is not much difference.