I've always somewhat followed this concept. But to a slightly larger scale. You're going to need some background mapping...I'd at least generate a general world map or at least a continent map depending on the level of technology and exploration of the people of the world.

There's also cultural references you'll be missing out on in your storyline...such as casual mention of other cultures or societies on the world or continent that the travellign sort would need to know about...unless you can whip that out on the fly, your worlds culture will seem kinda empty without at least a background world map plan...I'd generate a continent and start populating it as the players encounter parts AND as you mention other societies and cultures you can draw them in to the empty spots.