Use a wood block and a spring-loaded center-punch to locate the hole. back the inside of the pot with the block and mark the outside with the punch. This will allow the cutting edge of a small bit like a 1/8" bit to grab and keep the bit from walking. this is not necessary, but makes sure your hole location is exactly where you want it.
Pulse the drill to get started - do not wind it out. If the steel heats, it will work harden (if pot is 18-8 anyway, 304 does not work harden) and be harder to drill. Ensure you keep the wood backing on the inside to allow for application of some pressure. (Not a ton - you are not trying to shove the bit through the metal). Not only that, but if you go through too quickly, the metal will grab the bit and climb, making a nasty hole.
Step bits will work well at this point, just remember that coating the step drill with a light coat of cutting fluid (or any oil for that matter) will help.
If you can back the inside of the pot safely when drilling, it will be much easier. Safety is always a concern. Use proper PPE. Getting a metal shaving in your eye is never fun.... Running a drill bit into your hand also kind of sucks. Have done both.
