Actually you are missing only one thing, TimeMachine will ONLY write to an HFS+ formatted disk so you need to backup to a sparseimage disk image file.
Create the sparseimage disk image with Disk Utility, be sure to select the image type as Sparse Image and the format as HFS+. Make it as big as the partition you are putting it on less a bit. The created disk image will only be a couple hundred MB.
If you are on Mojave even if you select HFS+ as the disk image it may be created as an APFS format. So you will need to mount the image, select it in Disk Utility and reformat it as HFS+.
Now you need to go into terminal and tell TimeMachine about the new backup volume that you have mounted from the SMB share:
sudo tmutil setdestination "/Volumes/TimeMachineBackups/"
Where "TimeMachineBackups" is the name of your mounted Time Machine disk image.
Now just set that volume to mount at startup under System Preferences > Users > Startup Items and you should be good to go.
I recently did this at work and it works great.