In order for Site Manager to install and connect to a Remote SQL Server you must first install SQL Express on the server.

On the SQL Server you must enable TCP/IP Remote Connections

After changing the setting you must restart SQL Server service for it to take effect

On the server where you are going to install Site Manager you must set the Classic .Net Application Pool to run as the user that has SQL Admin access.

When installing Site Manager instead of entering the SQLinstance name enter the Server Name that is running the SQL Server you wish to connect to