Before you can use this feature the database schema will need to be initialized. The database scheme is managed by the managment tool.
A connecton string will need to be configured in the managmenet tool to connect to the database. A database user will need to be created with db_owner, db_datareader and db_datawriter permissions to the database. The created database user will also need to be provided in the management tool.
Database connection will need to be tested to ensure a connection can be established. A database update may be required for the update, in these cases the management tool will display instructions for a database update. Instruction on how to update the database using the managment tool can be found here.
For an average sized deployment, the database will not exceed 500MB.