Heat a large nonstick or cast-iron skillet over medium-high heat.
Add in sausage, onion powder, and garlic powder, to the skillet. Break into small chunks as the sausage cooks until it is browned and no longer pink.
Add in butter and melt.
Sprinkle flour evenly over sausage and stir to evenly coat sausage and distribute flour through rendered fat. Cook for 1-2 minutes to remove the raw taste of flour.
Slowly whisk in 2 cups of milk, 1/2 cup at a time, whisking constantly. Bring to a gentle bubble and then reduce heat to medium-low. Add in nutmeg and pepper, and cook until thickened--about 8-10 minutes. Note: If you would like thinner sausage gravy, add in up to 1 cup of additional milk, adding only 1/4 cup at a time until desired consistency is achieved.
Once sausage gravy is thickened, turn off the heat and taste to see if salt or pepper is needed. Add in a dash of Worchestershire sauce if you have on hand if desired.
Whole milk is recommended for the richest results. However, any fat percentage will work.
Be sure to use freshly grated nutmeg, not ground nutmeg. The tiny bit of nutmeg will help to balance out the white gravy.
Use any savory ground breakfast sausage you desire, keeping in mind you may need to add in up to 1 additional tablespoon of butter if you use lean chicken or turkey sausage. The fat is needed to thicken to form the roux and thicken the gravy.