Just one quarter of the Republic's businesses are passing on higher costs to their customers, according to a new survey from Isme, the small lobby business group.
The survey also found that a quarter of companies had lost market share because of increased costs.
Isme said the survey results confirmed the extent and impact of cost increases on small businesses over the past three years.
The group also claimed that the results "put paid to the myth perpetrated by those self interests, mainly in the political arena, that business is responsible for the so-called rip-off Ireland".
Unless urgent action is taken "at official level", Irish companies will be forced to shed jobs, relocate abroad or close, Isme warned.
The survey of more than 400 companies found that average costs for business had increased by 30 per cent since 2002.
Insurance and waste and water charges were behind the highest cost increases, according to the survey.
The research also shows, however, that 80 per cent of companies view labour costs as the outlay that causes "the greatest difficulty" for their operations.
Some 80 per cent of respondents also said that climbing costs had hit their profits, while almost 40 per cent said costs had reduced the number of people they could employ.
Isme chief executive Mark Fielding pointed to "Government-controlled costs" as the most noticeable cost-related problem faced by small businesses.
"The survey results should act as a wake-up call to the authorities to finally realise that the indigenous sector cannot continue to sustain these levels of cost increases while striving for increased productivity," Mr Fielding said.
The Government is "disingenuous" in calling on small businesses to move up the value chain while simultaneously sanctioning high cost increases, he added.
Mr Fielding claims that small companies are as much, if not more, a victim of a high cost environment as the general public.
"These firms have little or no market power and are price-takers rather than price-makers," said Mr Fielding.
