Read the error messages and the event logs very carefully. It can be a bit obtuse as to what it is actually complaining about. Invariably it is not the backup destination which is too small but the source drive(s) The VSS writer service needs a minimum amount of space to initialise the snapshot so will fail is the source disk is too full.
A relatively well known problem arises from the size of the System Reserved partition because by default this can be as little as 100MB. The base bootmgr file is OK but if the language pack is added it reduces the free space to below a level where VSS cannot work. A simple check is to exclude system reserved from the backup and see if it will complete.