Preheat your oven to 350°F (175°C).
In a skillet over medium heat, cook the breakfast sausage until browned and fully cooked. Drain any excess grease and set aside.
In a large mixing bowl, whisk together the eggs, milk, salt, black pepper, garlic powder, and onion powder until well combined.
Add the diced bread, cooked sausage, bell peppers, onion, and diced potatoes (if using) into the egg mixture. Stir gently to combine.
Grease the 9x13-inch baking dish with a little oil or cooking spray. Pour the mixture evenly into the dish.
Spread the shredded cheddar cheese on top of the egg mixture.
Cover the dish with aluminum foil and bake in the preheated oven for 30 minutes.
After 30 minutes, remove the foil and bake for an additional 15 minutes, or until the cheese is bubbly and golden brown, and the center is set.
Remove from the oven, let it cool for 5-10 minutes, then slice and serve warm.