Some drill bits will allow you to cut both the larger counterbore and the clearance hole for the screw thread in one hit. If not, you'll often find it easier to drill the larger, stopped hole, first of all. You can then use the centre point left behind to follow through with the smaller bit. After that, depending on your application, you may also need to drill a small pilot hole (narrower than the screw's diameter) to prevent splitting. Otherwise, your scheme of work sounds fine. Just don't try to use an imperial plug cutter with metric drills, or vice-versa.
