there are a variety of drill bits for making holes. i used a paddle type because that's what i could put my hands on. it was not quite big enough so i enlarged it with a utility knife, then used a rasp to smooth the edges. it was more complicated than it needed to be because someone doesn't put tools back...but even so, only took me about 15 min.
don't put to much pressure on the bucket when you drill. take a sharpie or something and mark your hole first so that you know you are placing the gate properly. you don't want it to high or to low.
other than placing it properly and not cracking the bucket by getting heavy handed, it's easy :-D
test it with water before you put honey in the bucket!