Convert macOS High Sierra 10.13.6 laptop to VM

I have an old laptop that I need to keep running, but the hardware is failing. So I wanted to see if I can convert it to a VM. I have created a full Time Machine backup. I have also downloaded the Install macOS High Sierra install app from the App Store. The system requirements say this is a supported guest OS 10.13.6. But I am unable to figure out how to install.
I tried to create a VM using the install app, but when I choose install os, it seems to recognize the inter HD of the host and not of the VM configuration.
Host Machine is Mac-Mini 2018.
I am running Parallels 1.9.4. I am on a trial version from the App Store to see if I can get this working first before purchase.
I thought I could use the restore from Time Machine, but I get an error saying is can't restore because this is not the same machine the backup was run from.
Help on how I would accomplish this.