In the Kama-Vyatka region, new trading houses specializing mainly in leather and shoe production were opening. The leader in the number of such enterprises was the city of Sarapul in the Sarapul district. It was here that the trading and industrial enterprise "Nikolai Vasilievich Smagin Sons. Trading House. Leather Factory and Shoe Production" was founded. The founder of the firm is considered to be Nikolai Vasilievich Smagin, born on December 4, 1850, into the family of V. I. and M. M. Smagin. Nikolai received a good education and upbringing from his parents and inherited some small merchant businesses from his father. He married Anna Vasilievna Moschevitina, the daughter of a merchant, and never regretted this marriage.

Thanks to diligence, good management, and a responsible approach to business, Smagin's trading house became the largest factory in Sarapul. The products were sold at the largest fairs in the Irbit and Nizhny Novgorod provinces. The enterprise received various awards for its successful work, including the medal "For Diligence and Art" from the Ministry of Finance, a medal from the All-Russian Industrial Exhibition of 1896, as well as several awards from Emperor Nicholas II and at Nizhny Novgorod exhibitions. In addition to entrepreneurship, Nikolai Vasilievich was engaged in merchant activities. He was a first-guild merchant, the city mayor, a commerce advisor, and a hereditary honorary citizen. Having accumulated sufficient funds, Smagin invested them in charity.

On December 27, 1910, a city meeting discussed awarding N. V. Smagin the title of honorary citizen for his charitable activities. He dedicated more than 15 years to serving in the Pokrov Church and donated his stone house for a future orphanage. In 1915, the Smagin couple donated an orphanage for children and a hospice for those suffering from chronic illnesses to the city, which were considered among the best in the area.